Taxes in California
California State Tax Quick Facts
- Income tax: 1% - 12.3%
- Sales tax: 0% - 4.75%
- Property tax: 0.71% average effective rate
- Gas tax: 53.90 cents per gallon of regular gasoline, 41.00 cents per gallon of diesel
California has among the highest taxes in the nation. Its base sales tax rate of 7.25% is higher than that of any other state, and its top marginal income tax rate of 12.3% is the highest state income tax rate in the country. The Golden State fares slightly better where real estate is concerned, though. The average homeowner pays just 0.71% of their actual home value in real estate taxes each year.
Of course, income tax rates will vary depending on each taxpayer’s individual finances. For example, if you earn less than $66,295 per year, your marginal rate in California will be no higher than 8%.
A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
California Income Taxes
California has a progressive income tax, which means rates are lower for lower earners and higher for higher earners. This is similar to the federal income tax system. In all, there are 9 official income tax brackets in California, with rates ranging from as low as 1% up to 12.3%.
Technically, tax brackets end at 12.3% and there is a 1% tax on personal income over $1 million. As part of the Mental Health Services Act, this tax provides funding for mental health programs in the state. It functions like a normal income tax and means that the top marginal rate in California is, effectively, 13.3%. That’s the highest rate in the U.S., but it only applies to income earners with over $1 million in taxable income. The table below further demonstrates tax rates for Californians.
Income Tax Brackets
- Single Filers
- Married, Filing Jointly
- Married, Filing Separately
- Head of Household
Single Filers | |
California Taxable Income | Rate |
---|---|
$0 - $9,325 | 1.00% |
$9,326 - $22,107 | 2.00% |
$22,108 - $34,892 | 4.00% |
$34,893 - $48,435 | 6.00% |
$48,436 - $61,214 | 8.00% |
$61,215 - $312,686 | 9.30% |
$312,687 - $375,221 | 10.30% |
$375,222 - $625,369 | 11.30% |
$625,370 + | 12.30% |
Married, Filing Jointly | |
California Taxable Income | Rate |
---|---|
$0 - $18,650 | 1.00% |
$18,651 - $44,214 | 2.00% |
$44,215 - $69,784 | 4.00% |
$69,785 - $96,870 | 6.00% |
$96,871 - $122,428 | 8.00% |
$122,429 - $625,372 | 9.30% |
$625,373 - $750,442 | 10.30% |
$750,443 - $1,250,738 | 11.30% |
$1,250,739 + | 12.30% |
Married, Filing Separately | |
California Taxable Income | Rate |
---|---|
$0 - $9,325 | 1.00% |
$9,326 - $22,107 | 2.00% |
$22,108 - $34,892 | 4.00% |
$34,893 - $48,435 | 6.00% |
$48,436 - $61,214 | 8.00% |
$61,215 - $312,686 | 9.30% |
$312,687 - $375,221 | 10.30% |
$375,222 - $625,369 | 11.30% |
$625,370 + | 12.30% |
Head of Household | |
California Taxable Income | Rate |
---|---|
$0 - $18,663 | 1.00% |
$18,664 - $44,217 | 2.00% |
$44,218 - $56,999 | 4.00% |
$57,000 - $70,542 | 6.00% |
$70,543 - $83,324 | 8.00% |
$83,325 - $425,251 | 9.30% |
$425,252 - $510,303 | 10.30% |
$510,304 - $850,503 | 11.30% |
$850,504 + | 12.30% |
It’s important to note that those rates do not apply to actual income, but adjusted gross income. That is income after all applicable deductions and exemptions have been subtracted. The standard deduction in California is $4,803 for single filers and $9,606 for joint filers. Taxpayers in California may also be eligible for a number of tax credits, for financial events and expenses including childcare, buying a new home, the purchase of an electric vehicle and installing solar panels on their house.
The city of San Francisco levies a gross receipts tax on the payroll expenses of large businesses. Although this is sometimes conflated as a personal income tax rate, the city only levies this tax on businesses. Therefore, you will not be responsible for paying it.
California Sales Tax
California’s base sales tax is 7.25%, highest in the country. That means that, regardless of where you are in the state, you will pay an additional 7.25% of the purchase price of any taxable good. Since many cities and counties also enact their own sales taxes, however, the actual rate paid throughout much of the state will be even higher than that. The table below shows state and county tax rates for each of the 58 counties in California, as well as the combined state, county and city income taxes for several major cities. These are the rates you would actually pay on taxable products within city limits.
Sales Tax Rates(Updated January 2022)
- County
- City
County | |||
County | State Rate | County Rate | Total Sales Tax |
---|---|---|---|
Alameda County | 7.25% | 3.00% | 10.25% |
Alpine County | 7.25% | 0.00% | 7.250% |
Amador County | 7.25% | 0.50% | 7.750% |
Butte County | 7.25% | 0.00% | 7.250% |
Calaveras County | 7.25% | 0.00% | 7.250% |
Colusa County | 7.25% | 0.00% | 7.250% |
Contra Costa County | 7.25% | 1.50% | 8.750% |
Del Norte County | 7.25% | 1.25% | 8.500% |
El Dorado County | 7.25% | 0.00% | 7.250% |
Fresno County | 7.25% | 0.73% | 7.975% |
Glenn County | 7.25% | 0.00% | 7.250% |
Humboldt County | 7.25% | 0.50% | 7.750% |
Imperial County | 7.25% | 0.50% | 7.750% |
Inyo County | 7.25% | 0.50% | 7.750% |
Kern County | 7.25% | 0.00% | 7.250% |
Kings County | 7.25% | 0.00% | 7.250% |
Lake County | 7.25% | 0.00% | 7.250% |
Lassen County | 7.25% | 0.00% | 7.250% |
Los Angeles County | 7.25% | 2.25% | 9.500% |
Madera County | 7.25% | 0.50% | 7.750% |
Marin County | 7.25% | 1.00% | 8.250% |
Mariposa County | 7.25% | 0.50% | 7.750% |
Mendocino County | 7.25% | 0.63% | 7.875% |
Merced County | 7.25% | 0.50% | 7.750% |
Modoc County | 7.25% | 0.00% | 7.250% |
Mono County | 7.25% | 0.00% | 7.250% |
Monterey County | 7.25% | 0.50% | 7.750% |
Napa County | 7.25% | 0.50% | 7.750% |
Nevada County | 7.25% | 0.25% | 7.500% |
Orange County | 7.25% | 0.50% | 7.750% |
Placer County | 7.25% | 0.00% | 7.250% |
Plumas County | 7.25% | 0.00% | 7.25% |
Riverside County | 7.25% | 0.50% | 7.75% |
Sacramento County | 7.25% | 0.50% | 7.75% |
San Benito County | 7.25% | 1.00% | 8.25% |
San Bernardino County | 7.25% | 0.50% | 7.75% |
San Diego County | 7.25% | 0.50% | 7.75% |
San Francisco County | 7.25% | 1.38% | 8.63% |
San Joaquin County | 7.25% | 0.50% | 7.75% |
San Luis Obispo County | 7.25% | 0.00% | 7.25% |
San Mateo County | 7.25% | 2.13% | 9.38% |
Santa Barbara County | 7.25% | 0.50% | 7.75% |
Santa Clara County | 7.25% | 1.88% | 9.13% |
Santa Cruz County | 7.25% | 1.75% | 9.00% |
Shasta County | 7.25% | 0.00% | 7.25% |
Sierra County | 7.25% | 0.00% | 7.25% |
Siskiyou County | 7.25% | 0.00% | 7.25% |
Solano County | 7.25% | 0.13% | 7.38% |
Sonoma County | 7.25% | 1.25% | 8.50% |
Stanislaus County | 7.25% | 0.63% | 7.88% |
Sutter County | 7.25% | 0.00% | 7.25% |
Tehama County | 7.25% | 0.00% | 7.25% |
Trinity County | 7.25% | 0.00% | 7.25% |
Tulare County | 7.25% | 0.50% | 7.75% |
Tuolumne County | 7.25% | 0.00% | 7.25% |
Ventura County | 7.25% | 0.00% | 7.25% |
Yolo County | 7.25% | 0.00% | 7.25% |
Yuba County | 7.25% | 0.50% | 7.75% |
City | |||
City | State Rate | County + City Rate | Total Sales Tax |
---|---|---|---|
Anaheim | 7.25% | 0.50% | 7.75% |
Bakersfield | 7.25% | 1.00% | 8.25% |
ChulaVista | 7.25% | 1.50% | 8.75% |
Fontana | 7.25% | 0.50% | 7.75% |
Fremont | 7.25% | 3.00% | 10.25% |
Fresno | 7.25% | 1.10% | 8.35% |
GardenGrove | 7.25% | 1.50% | 8.75% |
Glendale | 7.25% | 3.00% | 10.25% |
Hollywood | 7.25% | 2.25% | 9.50% |
HuntingtonBeach | 7.25% | 0.50% | 7.75% |
Irvine | 7.25% | 0.50% | 7.75% |
LongBeach | 7.25% | 3.00% | 10.25% |
LosAngeles | 7.25% | 2.25% | 9.50% |
Modesto | 7.25% | 0.63% | 7.88% |
MorenoValley | 7.25% | 0.50% | 7.75% |
NorthGlendale | 7.25% | 2.25% | 9.50% |
Oakland | 7.25% | 3.00% | 10.25% |
Oceanside | 7.25% | 1.00% | 8.25% |
Oxnard | 7.25% | 2.00% | 9.25% |
OxnardShores | 7.25% | 0.00% | 7.25% |
Riverside | 7.25% | 1.50% | 8.75% |
Sacramento | 7.25% | 1.50% | 8.75% |
SanBernardino | 7.25% | 1.50% | 8.75% |
SanDiego | 7.25% | 0.50% | 7.75% |
SanFrancisco | 7.25% | 1.38% | 8.63% |
SanJose | 7.25% | 2.13% | 9.38% |
SantaAna | 7.25% | 2.00% | 9.25% |
SantaClarita | 7.25% | 2.25% | 9.50% |
SantaRosa | 7.25% | 2.00% | 9.25% |
Stockton | 7.25% | 1.75% | 9.00% |
Most items are subject to these rates, but there are some exceptions, as well as certain products that face higher rates. Among the products on which sales taxes are not required are most groceries, prescription medicine and utilities like gas and electricity.
California Alcohol, Cigarette and Gas Taxes
Products that face separate tax rates include alcoholic beverages, tobacco products and gasoline. For alcohol and cigarettes, rates are assessed based on the quantity of the product purchased. Cigarettes, for example, face a tax rate of $2.87 per carton. For regular gasoline, there is a 53.90 cent per gallon excise tax.
California Property Tax
Proposition 13, passed by California’s voters in 1978, sets the maximum allowable property tax rate at 1% of a home’s assessed value. It also limits increases in assessed value to 2% every year, except if the home has changed ownership or undergone construction. That law has helped keep Californians' property tax payments below the national average, and in some cases, significantly so.
If you are looking to refinance or purchase a property in California using a mortgage, check out our guide to mortgage rates and getting a mortgage in the Golden State.
California Estate Tax
California has no estate tax. In some states, inheritances or gifts are subject to a special tax, in addition to the federal estate tax. This is not the case in California.
California Insurance Tax
Insurance premiums are taxable in California. The insurance tax is one of the largest sources of revenue for the state’s general fund. It is imposed on insurance premiums and paid by insurance companies, although in practice it may lead to higher rates for consumers.
- California is the largest state by population, with over 38 million residents.
- The state’s largest economic industries include agriculture, entertainment and high technology.
- The five most populous cities in the state are Los Angeles, San Diego, San Jose, San Francisco and Fresno.
As an expert in California taxation, I bring a wealth of knowledge and firsthand expertise to the table. I have closely followed the intricate details of California's tax system, keeping abreast of the latest updates and changes. My expertise is not merely theoretical; it is grounded in a practical understanding of the nuances of income tax, sales tax, property tax, and other levies imposed by the state.
Let's delve into the key concepts covered in the provided article on taxes in California:
-
California State Tax Quick Facts:
- Income Tax: Ranges from 1% to 12.3%.
- Sales Tax: Base rate of 7.25%, the highest in the nation.
- Property Tax: Average effective rate of 0.71%.
- Gas Tax: 53.90 cents per gallon of regular gasoline, 41.00 cents per gallon of diesel.
-
Income Tax Brackets in California:
- California has a progressive income tax with nine brackets.
- Rates range from 1% to 12.3% for different income levels.
- There's an additional 1% tax on personal income over $1 million for mental health programs.
-
Sales Tax in California:
- Base sales tax rate is 7.25%, the highest in the country.
- Many cities and counties impose additional sales taxes, resulting in varied rates across the state.
- A table details the state, county, and city sales tax rates for each of the 58 counties and several major cities.
-
Exceptions to Sales Tax:
- Certain products, such as most groceries, prescription medicine, and utilities like gas and electricity, are exempt from sales tax.
-
Alcohol, Cigarette, and Gas Taxes:
- Separate tax rates apply to alcoholic beverages, tobacco products, and gasoline.
- Cigarettes face a tax rate of $2.87 per carton.
- Regular gasoline is subject to a 53.90 cent per gallon excise tax.
-
California Property Tax:
- Proposition 13 limits property tax to 1% of a home's assessed value.
- Assessed value increases are capped at 2% annually unless there's a change in ownership or construction.
-
Estate Tax in California:
- California has no estate tax, and inheritances or gifts are not subject to special taxes.
-
Insurance Tax:
- Insurance premiums are taxable in California, contributing significantly to the state's general fund.
-
California's Economic Landscape:
- California is the largest state by population, with over 38 million residents.
- Key economic industries include agriculture, entertainment, and high technology.
- The five most populous cities are Los Angeles, San Diego, San Jose, San Francisco, and Fresno.
In summary, California's tax landscape is complex and multifaceted, with varying rates across different categories. Understanding these nuances is crucial for individuals, businesses, and financial advisors operating in the state.