California

Sales Tax

  • Statewide: 7.25% (includes mandatory local rate of 1.25%)
  • Municipalities can levy an additional sales tax of no more than 4.75%.
  • Current average sales tax (with local taxes included): 8.618%
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
  • Gasoline Tax: 86.55 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 124.31 cents/gallon (Includes all state, local, and federal taxes)

 

Personal Income Tax

  • Personal Income Tax Rate Range: Ten brackets from 1% to 13.3% (for amounts over $1,000,000)
  • Standard deduction: Single filing status: $4,803/Married Filing Jointly: $9,606
  • Personal Exemption Allowance: $129/Dependent Exemption: $400/Taken as tax credit and phased out above $212,288.
  • Itemized Deductions Allowed?: Yes. Subject to limitations.
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Taxable at ordinary income tax rates*
  • Military Pay
    • Active Duty Pay: Taxable to the extent included in federal Adjusted Gross Income*
    • Military Retirement Pay: Taxable at ordinary income tax rates*
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Taxable to the extent included in federal AGI* 
Income tax comments: *Income over $1 million is subject to a 1% mental health services tax included in tax rates above. Benefits received as a surviving spouse of military personnel killed in the line of duty are not taxed.

 

Property Tax

  • Local municipalities average .76% of the property's assessed value.
  • Calculation of assessed value: Varies. New owners are assessed at 1% of fair market value while existing owners pay off of 1976 assessed value; taxes cannot increase more than 2% per year (per Proposition 13).
  • Relief programs for:
    • Owner-occupied: May be eligible for up to $7,000 exemption of assessed value.
    • Veterans: May be eligible for additional exemption for up to $4,000 of assessed value.
    • Disabled Veteran/Surviving Spouse (not remarried): Exempts up to $147,535 (up to $221,304 if meet low-income requirements) of assessed value if meet certain requirements.
    • Over 62 or blind and disabled: Can defer taxes if meet certain requirements.
  • Personal Property Tax: Yes, rates and exemptions vary.
  • Note: Property purchases/transfers between parents and children as well as grandparents and grandchildren may be eligible for a $1 million exemption of assessed value.

 

Inheritance & Estate Taxes: None

 

Department of Revenue website: www.ftb.ca.gov

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