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. There is also a jurisdiction that collects local income taxes. California has an 8.84 percent corporate income tax rate. California also has a 7.25 percent state sales tax rate and an average combined state and local sales tax rate of 8.85 percent. California has a 0.68 percent effective property tax rate on owner-occupied housing value.
California does not have an estate tax or inheritance tax. California has a 68.1 cents per gallon gas tax rate and a $2.87 cigarette excise tax rate. The State of California collects $9,229 in state and local tax collections per capita. California has $13,845 in state and local debt per capita and has a 79 percent funded ratio of public pension plans. California’s tax system ranks 48th overall on the 2025 State Tax Competitiveness 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 2024: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
115 min read
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.
2 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
8 min read
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
9 min read
IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.
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Property taxes are the primary tool for financing local government and generating state-level revenue in some states as well.
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The FDA’s proposal to ban flavored cigars would carry significant revenue implications for many state governments.
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A marriage penalty exists when a state’s income brackets for married taxpayers filing jointly are less than double the bracket widths that apply to single filers. In other words, married couples who file jointly under this scenario have a higher effective tax rate than they would if they filed as two single individuals with the same amount of combined income.
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If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
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