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): 8.66%
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: Exempt
- Gasoline Tax: 86.50 cents/gallon (Includes all state, local, and federal taxes)
- Diesel Fuel Tax: 120.72 cents/gallon (Includes all state, local, and federal taxes)
Personal Income Tax
- Personal Income Tax Rate Range: Ten brackets from 1.1% to 14.4% (for amounts over $1,000,000; $1,354,550 for married filing jointly)
- Standard deduction: Single filing status: $5,363
- Personal Exemption Allowance: $144/Dependent Exemption: $446/Taken as tax credit and phased out above $237,035 ($474,075 for joint filers).
- 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. New 1.1% payroll tax expansion on wage income.
Property Tax
- Local municipalities average .71% 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: Exempts up to $254,656 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
