Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
California Tax Rates, Collections, and Burdens
How does California’s tax code compare? California has a graduated state individual income tax, with rates ranging from 1.00 percent to 13.30 percent. California has a 8.84 percent corporate income tax rate. California has a 7.25 percent state sales tax rate, a max local sales tax rate of 2.50 percent, and an average combined state and local sales tax rate of 8.82 percent. California’s tax system ranks 48th overall on our 2023 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and California is no exception. The first step towards understanding California’s tax code is knowing the basics. How does California collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?
State Tax Data
Average Local Sales Tax Rate1.57%See Full Study
State and Local General Sales Tax Collections per Capita$1498Rank: 15
State Gasoline Tax Rate (cents per gallon)68.15¢Rank: 1
State Cigarette Tax Rate (dollars per 20-pack)$2.87Rank: 12
Compare the latest 2023 sales tax rates as of July 1st. Sales tax rate differentials can induce consumers to shop across borders or buy products online.
New Jersey levies the highest top statutory corporate tax rate at 11.5 percent, followed by Minnesota (9.8 percent) and Illinois (9.50 percent). Alaska and Pennsylvania levy top statutory corporate tax rates of 9.40 percent and 8.99 percent, respectively.
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
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