Sales Tax Rates Sales and use taxes in California

1 sales tax rates

1.1 supplementary local sales taxes

1.1.1 local sales tax rate cap
1.1.2 sb 566 (2003) , rise in local sales tax increases
1.1.3 cities @ least 10.00% combined sales tax rates

1.1.3.1 los angeles county sales tax rate increases july 1, 2017
1.1.3.2 los angeles county sales tax rate increases october 1, 2017


1.1.4 cities highest combined sales tax rates county


1.2 local sales taxes subject voter approval under proposition 218

1.2.1 relationship between sales tax increases , public employee costs
1.2.2 county transportation sales taxes
1.2.3 sales tax taxpayer tool
1.2.4 local government data in sales tax elections
1.2.5 important issues related local sales tax elections


1.3 local sales tax reduction or repeal using proposition 218
1.4 recent statewide sales tax increases

sales tax rates

at 7.25%, california has highest minimum statewide sales tax rate in united states, can total 10.25% local sales taxes included. of january 1, 2017, statewide sales tax rate decreased 7.50% 7.25% result of expiration of temporary statewide sales tax increase under proposition 30 california voters approved in november 2012.

some claim high sales tax rates partially compensate reduced property tax revenue resulting proposition 13 california voters approved in june 1978. however, others point out that, in counties (all rural counties), property tax revenues today higher year before proposition 13 passed, after adjusting inflation , population growth. sales , use taxes in california collected california department of tax , fee administration, whereas income , franchise taxes collected franchise tax board.

the statewide base sales tax rate of 7.25% allocated follows:

7.25% – state + local

6.00% – state

3.9375% – state – general fund
0.50% – state – local public safety fund
0.50% – state – local revenue fund local health , social services
1.0625% – state – local revenue fund (2011)


1.25% – uniform local tax

0.25% – local county – transportation funds
1.00% – local city/county – operational funds

the statewide sales tax in california first imposed on august 1, 1933, @ rate of 2.50% under retail sales act of 1933. no local sales taxes levied @ time. in editorial dated september 5, 1933, los angeles times criticized 2.50% sales tax rate in stating sales-tax rate should not have exceeded 1 per cent , tax rate high discourage business, make tax less productive.

supplementary local sales taxes

supplementary local sales taxes may added cities, counties, service authorities, , various special districts (such bay area rapid transit district). local county sales taxes transportation purposes popular in california. additional local sales taxes levied counties , municipalities formally called district taxes. effect local sales taxes sales tax rates vary in california 7.25% (in areas no additional local sales taxes levied) 10.25%. example, city of sacramento, state capitol, has combined 8.25% sales tax rate, , los angeles, largest city in california, has combined 9.50% sales tax rate.

local sales tax rate cap

the combined tax rate of local sales taxes in county not allowed exceed 2.00 percent. however, statutory restriction , california legislature routinely allows local governments, through adoption of separate legislation, exceed 2.00 percent local tax rate cap. 2.00 percent local tax rate cap exceeded in city combined sales tax rate in excess of 9.25% (7.25% statewide tax rate plus 2.00% tax rate cap). of october 1, 2017, of los angeles county , 7 other california cities (albany (alameda county), el cerrito (contra costa county), greenfield (monterey county), hayward (alameda county), newark (alameda county), san leandro (alameda county), , union city (alameda county)) have combined sales tax rate in excess of 2.00 percent local tax rate cap.

sb 566 (2003) , rise in local sales tax increases

the number of local sales taxes increased following passage of sb 566 in 2003. sb 566 legally authorized california cities levy additional local sales taxes. sb 566 increased maximum combined local sales tax rate (local sales tax rate cap) can levied local governments 1.50% current 2.00%. of april 1, 2017, 176 cities , 32 counties have approved local sales tax increases. not has number of local city sales tax increases exploded since passage of sb 566, magnitude of sales tax increases (as measured sales tax rate increase) has increased more cities seeking larger sales tax rate increases. during november 2016 election, approximately 65 additional local sales tax measures approved voters in california. these local sales tax measures became operative on april 1, 2017.

the sb 566 language authorizing cities levy local sales taxes inserted near end of legislative session without usual public scrutiny, approved politically partisan vote, , signed law former california governor gray davis after election in recalled office.

cities @ least 10.00% combined sales tax rates

as of october 1, 2017, 15 california cities (all in los angeles county) have combined sales tax rate of @ least 10.00%:

effective january 1, 2017, california statewide sales tax rate decreased 0.25% result of expiration of temporary sales tax increase under proposition 30 approved california voters during november 2012 election. however, many local sales tax measures approved voters during november 2016 election, , sales tax increases became operative on april 1, 2017.

los angeles county sales tax rate increases july 1, 2017

on july 1, 2017, los angeles county transportation sales tax increase of 0.50% approved local voters during november 2016 election went effect. combined sales tax rate in los angeles county increased 8.75% 9.25% in unincorporated areas of county , cities within county except 15 cities voters approved local city sales tax increases. in 15 cities, new combined sales tax rates increased either 9.75% (avalon, commerce, culver city, downey, el monte, inglewood, san fernando, , south el monte) or 10.25% (compton, la mirada, long beach, lynwood, pico rivera, santa monica, , south gate).

los angeles county sales tax rate increases october 1, 2017

on october 1, 2017, los angeles county homeless programs/services sales tax increase of 0.25% approved voters during march 7, 2017 election became operative. combined sales tax rate in los angeles county increased 9.25% 9.50% in unincorporated areas of county , cities within county except 15 cities voters approved local city sales tax increases. in 15 cities, combined sales tax rate increased 10.00% (avalon, commerce, culver city, downey, el monte, inglewood, san fernando, , south el monte) or remained same @ 10.25% (compton, la mirada, long beach, lynwood, pico rivera, santa monica, , south gate).

the 0.25% sales tax increase not collected in 7 cities within los angeles county aggregate sales tax rate not 0.25 percent or more below legal local tax rate cap. 7 cities, have combined sales tax rate of 10.25%, compton, la mirada, long beach, lynwood, pico rivera, santa monica, , south gate. however, if sales tax rate of 7 cities expires or reduced while homeless programs/services sales tax increase in effect, homeless programs/services sales tax become operative in city.

cities highest combined sales tax rates county

as of october 1, 2017, following california cities have highest combined sales tax rate within each of 58 counties in california:

local sales taxes subject voter approval under proposition 218

all local sales taxes subject voter approval under proposition 218 ( right vote on taxes act ) california voters approved in november 1996. whether simple majority voter approval or two-thirds voter approval required depends upon type of sales tax levied , type of local government imposing sales tax.

unrestricted general sales taxes subject majority vote approval local voters. general sales taxes can spent local politicians general governmental purpose, including public employee salaries , benefits. general sales tax spending decisions made after tax election local politicians part of regular annual local government budget process. local governments may engage in general sales tax abuses in effort evade two-thirds vote requirement applicable special sales taxes.

special sales taxes dedicated 1 or more specific purposes subject two-thirds vote approval local voters. sales tax imposed local government other city or county (e.g., special district such local transportation agency) must special tax subject two-thirds vote approval local voters.

proposition 218 not legally authorize local government levy sales tax. legal authority levy local sales tax must come state statute. two-thirds vote of members of legislative body of local government required before local sales tax measure may presented voters @ election.

relationship between sales tax increases , public employee costs

the driving force behind many local sales tax increases skyrocketing public pension costs , public employee retiree healthcare. research has shown local sales tax increases concentrated in california localities have largest pension problems.

in effort increase chances of passing local sales tax, local governments engage in budgetary games in place sales tax measure on ballot fund politically popular service (e.g., public safety), , if sales tax passes, enables local government free other existing taxpayer funds can spent on less politically popular items such high public employee salaries , benefits.

county transportation sales taxes

countywide sales taxes transportation purposes popular in california. however, transportation sales taxes regressive , shift financial base of transportation systems user fees taxes paid taxpayers without regard direct reliance on transportation systems. county transportation sales taxes typically supported (including significant campaign contributions) interest groups disproportionately benefit tax, including local business community, construction industry, real estate developers, , public employee unions. counties have passed multiple transportation sales taxes increases such los angeles county has passed 4 transportation sales tax increases combined rate of 2.0%. county transportation sales taxes not include traffic performance standards require improved traffic conditions.

sales tax taxpayer tool

as part of taxpayer tools publication series, howard jarvis taxpayers association has released publication assist voters , taxpayers regarding local sales tax measures placed on ballot local government in california.

local government data in sales tax elections

it helpful voters have financial data local government proposing sales tax voters can make more informed voting decisions regarding merits , need sales tax. of financial data local government can obtained directly local government itself. additional information can of value voters includes public employee salary , benefits data (especially pension data), , annual budgetary , financial reports. local government budgetary spending priorities, reflected recent budgetary data, can helpful in general sales tax elections local politicians decide how spend sales tax proceeds.

extensive public data sources outside of local government available voters in connection local sales tax elections.

important issues related local sales tax elections

local government issues related sales tax elections (e.g., local government “informational” campaigns , impartial ballot questions) can impact integrity , fairness of election process. voter/taxpayer issues related local sales tax elections (e.g., cumulative tax burden , precedent) can impact individual voter decision-making process election outcomes. support , opposition campaigns in local sales tax elections can impact election outcomes.

local sales tax reduction or repeal using proposition 218

proposition 218 (“right vote on taxes act”) 1996 initiative constitutional amendment approved california voters. proposition 218 includes provision constitutionally reserving local voters right use initiative power reduce or repeal local tax, assessment, fee or charge, including provision reduced petition signature requirement qualify measure on ballot. local sales tax, including sales tax approved local voters, subject reduction or repeal using local initiative power under proposition 218.

examples reduction or repeal of local sales tax may appropriate include there has been significant waste or mismanagement of sales tax proceeds local government, when there has been controversial or questionable spending of sales tax proceeds local government (particularly sales tax proceeds used pay excessive public employee salaries and/or benefits such pensions), when quality of programs , services being financed sales tax proceeds not @ high level expected voters, when local sales tax rate excessive or unreasonably high (particularly in situations significant local sales tax increase narrowly approved voters), or when promises made local politicians spending of local sales tax proceeds broken after voter approval of sales tax (particularly in situations local politicians made legally nonbinding promises concerning spending of general sales tax proceeds not legally restricted specific purposes).

a local sales tax used repay bonds legally more complex situation because federal contract impairment issues may preclude exercise of local initiative power under proposition 218. local voter-approved transportation sales taxes include @ least portion of tax proceeds repay bonds. advice legal counsel needed in situations bonds have been issued , sales tax revenues have been pledged repay bonds. local compensatory initiative under proposition 218 alternative option when contract impairment problems present.

recent statewide sales tax increases

recent temporary statewide sales tax increases include:

from april 1, 2009 until june 30, 2011, state sales , use tax increased 1% 7.25% 8.25% result of 2008-2009 california budget crisis.
effective january 1, 2013, state sales , use tax increased 0.25% 7.25% 7.50% result of proposition 30 passed california voters in november 6, 2012 election. change four-year temporary tax increase expired on december 31, 2016.




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^ city & county sales & use tax rates . california state board of equalization. 
^ cal. const., art. xiii, § 36, subd. (f).
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^ california state board of equalization, sales , use tax rate changes special notice (l-499).
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^ california department of tax , fee administration, sales , use tax rate changes special notice (l-503).
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^ cal. rev. & tax. code, § 7286.40, subd. (b).
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^ california department of tax , fee administration expresses sales tax rate 3 decimal places in tax rate data files.
^ cal. const., art. xiii c, § 2.
^ cal. const., art. xiii c, § 2, subd. (b).
^ cal. const., art. xiii c, § 2, subd. (d).
^ cal. const., art. xiii c, § 2, subds. (a) & (d).
^ cal. const., art. xiii d, § 1, subd. (a).
^ cal. rev. & tax. code, §§ 7285.9, 7285.91 [cities]; cal. rev. & tax. code, §§ 7285, 7285.5 [counties].
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