California city and county sales and use tax rates 2014 pdf
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- Sales Tax Rates in Major Cities, Midyear 2019
- Sales Tax Rates in Major Cities, Midyear 2019
- Sales taxes in the United States
- Taxation in California
Sales taxes in the United States are taxes placed on the sale or lease of goods and services in the United States.
Sales Tax Rates in Major Cities, Midyear 2019
This tax has two parts:. It then provides more detail about which transactions are subject to this tax, the variation in tax rates across the state, the distribution of revenue among state and local governments, and revenue growth over the last few decades. The amount of sales tax generated by a sale depends on the tax rate and the dollar value of the goods sold. Other agencies are also involved in use tax collection: the Department of Motor Vehicles collects use tax on private sales of used vehicles, and the Franchise Tax Board collects use tax reported on personal income tax returns.
After the state collects sales tax revenue, it allocates the money to various state and local funds. As shown in Figure 2, roughly half—collected from an approximately 4. Another 1 percent, known as the Bradley—Burns rate, goes to cities and counties for general purposes. As described in the box Cities Compete for Bradley—Burns Revenue later in this report , the state has temporarily reduced this rate to 0.
The Bradley—Burns rate will return to 1 percent by Additionally, some local governments levy optional local rates—known as Transactions and Use Taxes TUTs —and a small portion of these funds are used for general purposes. Four sales tax funds have uniform state rates and support specified programs—an approximately 1. In addition, most of the revenue from the optional TUTs is used for specified purposes, primarily transportation programs.
The largest General Fund revenue source, the personal income tax, accounts for two—thirds of revenue. The relative contributions of these taxes has changed over time. In the s, the sales tax accounted for the majority of General Fund revenue, while the personal income tax contributed less than one—fifth.
As described later in this report, sales tax revenue has grown more slowly in part because consumers are spending a declining share of income on taxable goods. For example, the sales tax is a primary funding source for transportation agencies, but fire and water special districts do not receive any sales tax revenue. In addition, the sales tax is a significant revenue source for cities and counties, but those local governments face different constraints in the use of sales tax funds.
Specifically, a large share of city sales tax revenue comes from the 1 percent Bradley—Burns rate and can be used for general purposes.
In contrast, most county sales tax revenue is allocated to the two realignment funds, which are earmarked for specific programs. California has had a sales tax for eight decades, but the tax we have today is dramatically different from the initial one. When California created its sales tax in and its use tax in , the rate was 2. Since then, the overall tax rate has more than tripled, the use of sales tax revenue has become more local and more restricted, and many types of tangible goods have become exempt from the tax.
Figure 4 highlights some of the major changes, which generally fall into the following categories:. California levies its sales tax on the retail sale of tangible personal property. State law defines these terms as follows:. However, sales to some buyers, such as the federal government, are exempt from tax. Sales Taxes on Discounted Goods. However, for some types of discounts, sales tax applies to the full retail price before the discount is applied.
Specifically, if the customer compensates the retailer for the discount—for example, by trading in a used car—then sales tax generally applies to the full retail price, not the discounted price.
In addition, if the discount is available only through a bundled transaction such as a mobile phone purchased together with a service contract , then sales tax applies to the full unbundled price of the taxable good the full retail price of the mobile phone.
Sometimes, California consumers buy tangible goods from retailers who do not collect California sales tax. Those consumers generally owe use tax. For example, use tax is due in these common situations:. As discussed later in this report, many Californians are not familiar with the use tax, and compliance with this tax is uneven.
Some categories of household spending—such as restaurant food, furniture, cars, and clothes—generally are subject to the sales tax. However, many other categories are not. For example, housing—by far the largest expenditure category—generally is not subject to sales tax. Homes attached to land are real property rather than personal property, so their sale is not subject to sales tax.
However, homes are subject to property taxes. Household utilities generally are not subject to sales tax but often are subject to local utility user taxes. Groceries and prescription medicines are also exempt from sales tax, along with many other tangible goods that account for small portions of household spending. Many household purchases are not subject to sales tax because they are not tangible personal property. However, sales tax does apply to a very limited number of services that are closely connected to sales of tangible goods, such as mandatory service charges at restaurants.
In some years, a household might make several such purchases, resulting in relatively high sales tax payments.
In other years, the same household might not make any such purchases, resulting in much lower sales tax payments. Under California law, DVD purchases and rentals are subject to sales tax, but movies viewed at theaters are not. However, DVD consumers acquire physical objects, which are tangible goods and therefore subject to sales tax.
Seeing a movie at a theater, in contrast, is a service, not a physical object. When consumers purchase such services, they do not pay sales tax—even if they could have similar experiences by buying or renting tangible goods. DVDs are subject to sales tax, but streamed or downloaded movies are not. Books printed on paper are subject to sales tax, but electronic books are not. Digital goods are not tangible, so sales tax generally does not apply to them.
As a result, many goods are taxable in tangible form but not in digital form. Over—the—counter pain medication is subject to sales tax, but prescription pain medication is not. The Legislature created the sales tax exemption for prescription medicine in Food for home consumption is exempt from sales tax. In practice, it can be difficult to identify whether a particular food item is for home consumption, so the state has developed a complex system of rules for distinguishing taxable food from exempt food.
One such rule is that food heated right before it is sold is generally subject to sales tax. For example, fresh—baked pizza—whether picked up by the customer or delivered by the seller—is subject to sales tax.
Similarly, a sandwich purchased to go may shift from tax—exempt to taxable if the customer chooses to have the bread toasted. People who landscape their yards with pine trees pay sales tax. If they bought pear trees instead their purchases would not be taxed.
Pear trees are exempt from sales tax because they produce food for human consumption. This exemption applies to plants, animals, seeds, fertilizer, feed, and medicine used for food production.
Some Exemptions Are Narrow. Magazine subscriptions are exempt from sales tax. However, magazines sold at stores are taxed, as are subscriptions to daily newspapers. This narrow exemption—like many others—emerged from efforts to balance a variety of competing interests. The Legislature created a broad sales tax exemption for all types of periodicals in In , lawmakers eliminated this exemption as part of a broader effort to raise revenue.
After magazine publishers objected to this change, the Legislature reinstated the exemption for magazine subscriptions but not for other sales of periodicals. Most states assess sales tax at the state and local levels. Some states, like Kentucky, have sales taxes at the state level but do not allow local governments to levy local sale taxes. Alaska is the opposite—local governments impose sales taxes, but the state does not. A few states, such as Hawaii, levy taxes that are similar to sales taxes, but broader.
A handful of states, like Oregon, do not levy sales or gross receipts taxes. The nine states listed in Figure 7 highlight the wide range of variation in state sales tax policies. The first three columns of the figure highlight cross—state variation in exemptions for three types of tangible goods: groceries, clothing, and manufacturing equipment. As shown in the figure, groceries are completely exempt from sales tax in many states, including California.
Some states—like Oklahoma—tax groceries at the full rate, while other states—like Tennessee—tax groceries at a reduced rate. Taxation of clothing also varies across states. In Pennsylvania, most clothing is exempt. California, like many other states, taxes clothing at the full rate. As shown in the third column, many states exempt manufacturing equipment from sales tax. Some states, like Kentucky, generally tax manufacturing equipment at the full rate but offer some limited exemptions.
Other states, like California and Colorado, tax manufacturing equipment at a reduced rate. Since , California has exempted manufacturing equipment from the General Fund portion of the sales tax rate but not from the other parts of the rate. Under current law, this partial exemption will expire on July 1, The fourth column of the figure shows that some states levy sales taxes on downloaded music files. Some of these states, like Wisconsin, have passed laws expanding their sales tax bases to include digital goods in addition to tangible goods.
In both cases, states that tax digital goods must tackle some difficult legal issues. For example, they must develop—and then enforce—rules for determining where digital goods are sold. Taxation of Services Varies Across States. Some states, like California, charge sales tax on a very small set of services—those that are essentially inseparable from sales of tangible goods.
However, some states charge sales tax on a broader range of services, such as services performed on tangible goods. For example, some of the states shown in the figure levy sales taxes on automotive and appliance repair services.
In California and many other states, the sales tax base is standard across cities and counties. That is, a retail transaction that is taxable in one part of the state is taxable in other parts of the state.
Sales Tax Rates in Major Cities, Midyear 2019
Retail sales taxes are one of the more transparent ways to collect tax revenue. While graduated income tax rates and brackets are complex and confusing to many taxpayers, the sales tax is easier to understand: people can reach into their pocket and see the rate printed on a receipt. Less known, however, are the local sales taxes collected in 38 states. These rates can be substantial, so a state with a moderate statewide sales tax rate could actually have a very high combined state-local rate compared to other states. This report provides a population-weighted average of local sales taxes in an attempt to give a sense of the statutory local rate for each state. See Table 1 at the end of this Fiscal Fact for the full state-by-state listing of state and local sales tax rates. Of these, Alaska and Montana allow localities to charge local sales taxes.
The rates display in the files below represents total Sales and Use Tax Rates (state, local, county, and district where applicable).
Sales taxes in the United States
A majority vote of the City's qualified voters is needed to approve the ballot measure. Provided below is the ballot language as it will appear on November 6, In conjunction with the aforementioned ballot language pursuant to State law, the Council introduced an Ordinance which corresponds to the measure.
Taxation in California
Sales taxes in the United States are levied not only by state governments but also by city, county, tribal, and special district governments. In many cases these local sales taxes can have a profound impact on the total rate that consumers pay. Several private firms maintain databases of the sales tax rates in the over 11, local jurisdictions in the United States that levy them. Census-designated incorporated places with a population over , This report complements our semiannual calculation of the average of all local sales taxes in each state. In April, Glendale, California vaulted to the top of the list of cities imposing the highest combined state and local sales tax rate in the nation when a voter-approved increase of 0.
Categories Topics. State and local agencies will begin to see a revenue boost following the signature by Governor Newsom on April 25, , of League-supported AB Burke , which will expand the collection of millions in state sales and use taxes from out-of-state sales via the implementation of the landmark U. Supreme Court decision in South Dakota v. Wayfair, S. The Wayfair decision addressed a longstanding problem associated with the rapid growth of online sales, resulting in the under-collection of billions in local sales and use tax revenues across the country. Previous Court decisions, led by Quill Corp.
This tax has two parts:. It then provides more detail about which transactions are subject to this tax, the variation in tax rates across the state, the distribution of revenue among state and local governments, and revenue growth over the last few decades. The amount of sales tax generated by a sale depends on the tax rate and the dollar value of the goods sold. Other agencies are also involved in use tax collection: the Department of Motor Vehicles collects use tax on private sales of used vehicles, and the Franchise Tax Board collects use tax reported on personal income tax returns. After the state collects sales tax revenue, it allocates the money to various state and local funds.
Report in PDF · Companion Video The use tax rate is the same as the sales tax rate. As discussed later in this report, California's sales tax rate varies across cities and counties, ranging from percent to 10 percent. Since , California has exempted manufacturing equipment from the General.
The California income tax has ten tax brackets, with a maximum marginal income tax of Detailed California state income tax rates and brackets are available on this page. As a result, many individuals will hold onto more of their paychecks in the near term, thanks to the new tax bracket levels and several increased tax credits. However, the tax brackets will return to their previous rates after , while many tax credits will expire. Depending on your personal situation, your taxes may increase considerably in New Tax Brackets. See full list on fool.
Taxpayers moving into California or doing business in California should be aware of all the state and local tax implications. California is known for being a high-tax state. From a state budget perspective, the Personal Income Tax accounts for about 70 percent of the General Fund Revenue forecast for fiscal While some state taxes are lesser known, like local business taxes, their burden to individuals and businesses may be significant. Below is a discussion and examples of nuances in some of the most prevalent California taxes.
Taxes in California are among the highest in the United States and are imposed by the state and by local governments. From a tax terminology perspective, sales taxes are a proportional tax ; though because of the fact that lower income earners may pay a greater percentage of their earnings to sales taxes than higher income earners, a sales tax is also described as a regressive tax. The sales tax is imposed on retailers not consumers for the privilege of selling tangible personal property at retail. The use tax is imposed on the storage, use, or other consumption in California of tangible personal property purchased from a retailer. A retailer engaged in business in California which includes many businesses located outside of California engaging in E-commerce is generally required to collect the use tax from the purchaser at the time of sale and provide the purchaser a receipt. Sales and use taxes in California state and local are collected by the California Department of Tax and Fee Administration, whereas income and franchise taxes are collected by the Franchise Tax Board.
Until the passage of Proposition E, San Francisco levied a 1.