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Taxation in California
Taxes in California are collected by state and local governments through a number of tax categories. In total, for fiscal year 2022, California state and local governments together collected an average of $10,319 per capita from residents, the third highest per capita collections in the nation with the nationwide average being $7,109.
Sales tax: As of 2024, a 7.25% state sales tax is imposed on the sale of tangible goods. Unprepared food purchased in grocery stores, soap, medical devices, diapers, and feminine hygiene products are all excluded from sales tax. The average combined state and local sales tax rate is 8.85 percent. Some cities have sales tax as high as 11.25%. Use tax is imposed on the storage, use, or other consumption of tangible personal property purchased from a retailer.
Property tax: Property tax is imposed at a uniform 1% rate of assessed value and annual increases of assessed value is restricted to an inflation factor, not to exceed 2% per year due to California's Proposition 13. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction. People 55 or older can benefit from exemptions. Prop 13 applies equally to all real estate, residential and commercial—whether owned by individuals or corporations.
Income tax: California has a progressive personal income tax system, with rates which range from 1% to 13.3%. The 13.3% rate is the highest in the country, and applies to income over $1 million. California's corporate income tax is a flat tax with a rate of 8.84%. Banks and financial institutions are subject to a slightly higher rate of 10.84%. California has a 0.68 percent effective property tax rate on owner-occupied housing value and does not have an estate tax or inheritance tax.
At 7.25%, California has the highest minimum statewide sales tax rate in the United States.
Groceries, diapers, soap, medical devices, feminine hygiene products are all excluded from the California sales taxes.
Sales and use taxes in California (state and local) are collected by the California Department of Tax and Fee Administration, whereas income and franchise taxes are collected by the Franchise Tax Board.
The statewide base sales tax rate of 7.25% is allocated as follows:
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Taxation in California
Taxes in California are collected by state and local governments through a number of tax categories. In total, for fiscal year 2022, California state and local governments together collected an average of $10,319 per capita from residents, the third highest per capita collections in the nation with the nationwide average being $7,109.
Sales tax: As of 2024, a 7.25% state sales tax is imposed on the sale of tangible goods. Unprepared food purchased in grocery stores, soap, medical devices, diapers, and feminine hygiene products are all excluded from sales tax. The average combined state and local sales tax rate is 8.85 percent. Some cities have sales tax as high as 11.25%. Use tax is imposed on the storage, use, or other consumption of tangible personal property purchased from a retailer.
Property tax: Property tax is imposed at a uniform 1% rate of assessed value and annual increases of assessed value is restricted to an inflation factor, not to exceed 2% per year due to California's Proposition 13. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction. People 55 or older can benefit from exemptions. Prop 13 applies equally to all real estate, residential and commercial—whether owned by individuals or corporations.
Income tax: California has a progressive personal income tax system, with rates which range from 1% to 13.3%. The 13.3% rate is the highest in the country, and applies to income over $1 million. California's corporate income tax is a flat tax with a rate of 8.84%. Banks and financial institutions are subject to a slightly higher rate of 10.84%. California has a 0.68 percent effective property tax rate on owner-occupied housing value and does not have an estate tax or inheritance tax.
At 7.25%, California has the highest minimum statewide sales tax rate in the United States.
Groceries, diapers, soap, medical devices, feminine hygiene products are all excluded from the California sales taxes.
Sales and use taxes in California (state and local) are collected by the California Department of Tax and Fee Administration, whereas income and franchise taxes are collected by the Franchise Tax Board.
The statewide base sales tax rate of 7.25% is allocated as follows: