Complete guide to taxes in California — income tax, sales tax, property tax, and more. Tax burden rank: #1 of 51 (1 = highest tax burden).
Reviewed by Alexander O.M., MBA, BSc Engineering•Updated
California has the highest overall state-and-local tax burden in the country (rank #1 by Tax Foundation methodology) and the highest top marginal income tax rate at 13.3%, applied to incomes over $1 million. A 1% Mental Health Services Tax — passed under Proposition 63 in 2004 — sits on top of that same high-income bracket, bringing the effective top rate to 14.3%. What surprises people is that the bracket structure below that is actually fairly standard; most earners pay between 4% and 9.3%. Property tax is a different story entirely: Proposition 13 (1978) caps the assessed-value growth of any property at 2% per year regardless of market value, which produces the unusual outcome that neighbours in identical homes can pay wildly different property tax bills depending on when they bought. The statewide base property-tax rate is 1% of assessed value, though local add-ons push effective rates closer to 1.1%. The base sales tax of 7.25% is the highest statewide rate in the US, and local add-ons push the combined rate in most cities above 9%. California has no estate or inheritance tax. Detailed breakdown of income, sales, property, and excise taxes follows.
Income Tax
1-13.3%
Progressive
Sales Tax
8.82%
combined avg
Property Tax
0.71%
effective rate
Tax Burden Rank
#1
of 51 (1 = highest)
California Income Tax
California has a progressive income tax with rates ranging from 1-13.3%. Lower income earners pay the lower rate, with the top rate applying to the highest bracket.
California Sales Tax
The state sales tax rate in California is 7.25%. With an average local sales tax of 1.57%, the combined average sales tax rate is 8.82%.
California Property Tax
The effective property tax rate in California is 0.71%. With a median home value of $659,300, the median annual property tax bill is $5,946 ($496/month).
Corporate & Business Taxes
The corporate tax rate in California is 8.84%.
Other Taxes in California
Tax Type
Rate / Amount
Gas Excise Tax
$0.58/gallon
Cigarette Tax
$2.87/pack
Estate Tax
No
Inheritance Tax
No
Key Facts
Highest top marginal income tax rate in the nation at 13.3%. Mental Health Services Tax adds 1% above $1M.