Taxation in California

Taxes in California are collected by state and local governments through a number of tax categories. In total, for fiscal year 2022, California state and local governments together collected an average of $10,319 per capita from residents, the third highest per capita collections in the nation, with the nationwide average being $7,109. California does not have an estate tax or inheritance tax.

Sales tax: As of 2024, a 7.25% state sales tax is imposed on the sale of tangible goods. Unprepared food purchased in grocery stores, soap, medical devices, diapers, and feminine hygiene products are all excluded from sales tax. Local taxes are legislatively capped at an additional 2%, though because over 140 jurisdictions have exemptions to this cap, some cities have a sales tax as high as 11.25%. The average combined state and local sales tax rate is 8.85 percent. Use tax is imposed on the storage, use, or other consumption of tangible personal property purchased from a retailer.

Property tax: Property tax is imposed at a uniform 1% rate of assessed value with annual increases of assessed value restricted to an inflation factor, not to exceed 2% per year due to California's Proposition 13. It prohibits reassessment of a new base year value except in cases of (a) change in ownership, or (b) completion of new construction.