State taxes: California

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Overview of California taxes

California’s state income tax rates range from 1 percent to 12.3 percent. The Golden State also assesses a 1 percent surcharge on taxable incomes of $1 million or more. More on California taxes can be found below.

Personal income tax

California collects income tax from its residents at the following rates.

For single and married/registered domestic partners filing separately:

  • 1 percent on the first $8,544 of taxable income
  • 2 percent on taxable income between $8,545 and $20,255
  • 4 percent on taxable income between $20,256 and $31,969
  • 6 percent on taxable income between $31,970 and $44,377
  • 8 percent on taxable income between $44,378 and $56,085
  • 9.3 percent on taxable income between $56,086 and $286,492
  • 10.3 percent on taxable income between $286,493 and $343,788
  • 11.3 percent on taxable income between $343,789 and $572,980
  • 12.3 percent on taxable income of $572,981 and above

A 1 percent surcharge, the mental health services tax, is collected on taxable incomes of $1 million or more, making California’s highest marginal rate 13.3 percent.

For married people filing joint returns and heads of households, the rates remain the same, but the income brackets are doubled.

Residents must complete returns on Form 540 2EZ or Form 540. Nonresidents or part-year residents should file 540NR Short Form or 540NR Long Form. The deadline for all forms is April 15. When that date falls on a weekend or holiday, filers get until the next business day to submit their state returns.

Sales taxes

California’s minimum combined state, county and local sales and use tax rate is 7.5 percent (6.5 percent state-only portion and 1 percent collected by localities). Rates will be higher in cities and counties with special taxing districts.

Many business owners believe gift wrapping is a nontaxable service. However, unless food products were sold in a nontaxable transaction, sales tax generally applies to gift-wrapping charges. Publication 106 contains more information.

California’s statewide tax rate is 7.25 percent. In most areas of California, local jurisdictions have added district taxes that increase the applicable sales tax on products. Those district tax rates range from 0.1 percent to 1 percent and more than one district tax can be in effect in an area.

You can find your area’s effective combined sales tax rates via online search by address. Some cities also have created lists of city and county addresses to help retailers and consumers in identifying addresses located within their city.

You also may contact the California Department of Tax and Fee Administration (CDTFA) Customer Service Center at 1-800-400-7115 or call the local CDTFA office closest to you for assistance.

Personal and real property taxes

In the state of California, all real property is taxable and shall be assessed at fair market value.

The California Board of Equalization (BOE) acts in an oversight capacity to ensure compliance by county assessors with property tax laws, regulations and assessment issues. BOE conducts periodic compliance audits of the 58 county assessors’ programs and develops property tax assessment policies and informational materials to guide county assessors and local assessment appeals boards.

Any homestead exemptions are handled at the county level, and residents must contact the local county tax assessor’s office to inquire.

The state’s property tax postponement program allows eligible homeowners (senior citizens and blind or disabled residents) to postpone payments of property taxes on their principal places of residence. Some California counties may also offer a property tax postponement program for properties located in the county.

California previously offered a homeowner and renter assistance program under which a once-a-year payment was made to qualified individuals based on part of the property taxes assessed and paid on their homes or paid indirectly as part of their rent. However, this program was suspended due to budget constraints.

Inheritance and estate taxes

California has no inheritance tax, and its estate tax was phased out in connection with federal estate tax law changes. Executors of estates of people who died on or after Jan. 1, 2005, are no longer required to file a California estate tax return.

There is no inheritance tax in California.

Other California tax facts

California gives taxpayers the option to make voluntary fund contributions to more than a dozen nonprofit programs.

California taxpayers can check the status of their refunds by using the state’s interactive website.

No intangible personal property taxes are levied in California.

For more information, go to the California Franchise Tax Board’s website or call (800) 852-5711 toll-free.

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