Case Study: SoFi Stadium Construction Contracts & Sales Tax Revenue

Jan 19, 2023

Executive Summary

Determining which construction projects may qualify for a direct allocation of local 1% tax is complex. A temporary allocation of local use tax associated with construction projects can provide an agency with a much-needed boost in local tax revenue. If a contractor or subcontractor does not elect to obtain a jobsite sub-permit however, local tax will be allocated to the countywide pool based on the jobsite location, and the agency would only receive their proportional share of the countywide pool allocation for that project, a mere fraction of the 1% local tax.

Throughout the construction of the City of Inglewood's SoFi Stadium, HdL worked with the general contractor to determine qualified contracts and ensure proper registration and tracking of the local 1% sales tax revenue.

The Challenge

Ensure the City of Inglewood received the maximum amount of local sales and use tax revenue from the SoFi Stadium's construction materials and retail, food, and beverage sales.


Stan Kroenke, owner of the NFL's St. Louis Rams, planned to move the team back to Los Angeles (the team’s former home from 1946-1994). The City of Inglewood, with its rich history as a sports and entertainment mecca, was the logical choice for the next state-of-the-art venue. 

SoFi Stadium 2021In 2014, Kroenke purchased a 60-acre parcel of land adjacent to the old Hollywood Park Racetrack. The acreage, however, proved not large enough for a stadium and parking. In 2015, the Inglewood City Council scrapped plans to convert the old track into a large office/retail/residential project, and instead, approved a plan to incorporate the land into a 70,000-seat football stadium.

The SoFi Stadium would be unique in that it would be built using 100% private funds, requiring zero taxpayer dollars. It would guarantee countless jobs – both during construction and upon opening. 

The City of Inglewood, already a HdL sales tax and property tax client, turned to HdL for additional support in capturing all local tax dollars associated with the project. 


HdL met with project developers, contractors, and City staff to determine the best methods of tracking the new revenue stream and ensuring the City would receive the maximum amount of local tax revenue. Tax for construction contracts can be complex; oftentimes, contractors are both consumers and sellers of taxable goods for the same project. 

constructionWhen contractors are merely consumers of materials, they pay the sales tax to the supplier of the materials which is allocated to the jurisdiction where the supplier’s sales office is located. If, for whatever reason, the contractor has not paid sales tax on the materials or is both the seller and consumer of the material, they are required to consider the jobsite as the place of use. As the jobsite is not a permanent place of business, the tax revenue is allocated via the county pools.

A contractor who enters into a construction contract equal to or greater than $5,000,000 may elect to obtain a sub-permit for the jobsite of the qualifying contract enabling the contractor to make a direct allocation of tax to the local jurisdiction in which the jobsite is located rather than through the countywide pool. The qualifying contract price applies to each contract or subcontract for work performed at the jobsite, not the total value of the prime contract.


HdL is well-versed in maximizing local tax revenue for construction projects and always encourages contractors and subcontractors to participate in use tax programs. We worked closely with the stadium’s general contractor, Turner-AECOM Hunt, to create a system that… 

  • identified 50+ unique contractors or subcontractors, 
  • determined if each contract was eligible for direct allocation of local tax, 
  • and guided qualified contractors or subcontractors through proper registration and tracking of the local 1% sales tax revenue.

As with a project of this size, we were actively involved throughout the four-year construction timeline. We created specialized geographical area reports to capture all the local tax allocated to the project. We shared this data with Turner-AECOM Hunt quarterly (sometimes onsite donning hard hats!) to ensure nothing slipped through the cracks and with City staff to keep them apprised of the project’s progress, as well as current sales tax revenue to date. 

“It has been a great privilege to work with HdL on the SoFi Stadium. They are very knowledgeable and answered all of our teams and subcontractors’ questions. We could not have done it without HdL’s support on this mega job!” said Juanita Diaz, Turner-AECOM Hunt representative.


HdL continues to provide geographical reports to track SoFi’s ongoing revenue and insight on sales tax projections. “HdL has been a vital strategic partner and instrumental in assisting the City with expert analysis and innovative data collection services. They assisted Inglewood in evaluating the effectiveness of various contractual agreements,” said Christopher Jackson, Sr., Director of Economic and Community Development for the City of Inglewood.

These agreements include the SoFi Stadium - home of the Los Angeles Chargers and 2022 Champion Los Angeles Rams - and the Intuit Dome - the soon-to-be home of the Los Angeles Clippers – which will open in 2024. HdL assisted the City in its effort to make prudent financial and fiscal decisions which ultimately helped maintain their title as the “City of Champions.”

SoFi stadium



Additional Resource

Sales & Use Tax Guide for Construction Projects


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