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).
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While there are many ways to show how much is collected in taxes by state governments, our State Business Tax Climate Index is designed to show how well states structure their tax systems and provides a road map for improvement.
169 min read
Under the House Democrats’ tax plan, companies in 21 states and D.C. would face a higher corporate tax rate than in any country in the OECD.
1 min read
The six counties with the highest median property tax payments all have bills exceeding $10,000—Bergen, Essex, and Union Counties in New Jersey, and Nassau, Rockland, and Westchester counties in New York. All six are near New York City, as is the next highest, Passaic County, New Jersey ($9,881).
3 min read
It is important to understand how the SALT deduction’s benefits have changed since the SALT cap was put into place in 2018 before repealing the cap or making the deduction more generous. Doing so would disproportionately benefit higher earners, making the tax code more regressive.
6 min read
Neither Anchorage, Alaska, nor Portland, Oregon, impose any state or local sales taxes. Honolulu, Hawaii, has a low rate of 4.5 percent and several other major cities, including Milwaukee and Madison, Wisconsin, keep overall rates modest.
13 min read
Thirteen states have notable tax changes taking effect on July 1, 2021, which is the first day of fiscal year (FY) 2022 for every state except Alabama, Michigan, New York, and Texas. Individual and corporate income tax changes usually take effect at the beginning of the calendar year for the sake of maintaining policy consistency throughout the tax year, but sales and excise tax changes often correspond with the beginning of a fiscal year.
11 min read
With many state legislative sessions wrapping up for this year, and a new fiscal year about to begin, it’s a good time to examine some of the 2021 legislative trends—and sports betting taxes are among the more prominent.
5 min read
Krispy Kreme may have started the vaccine incentive ball rolling, but many states are putting big money into the effort with vaccine lotteries. Unlike a normal lottery, no one is paying for tickets—but the tax collector still gets paid when someone wins.
3 min read
Although most states are on solid financial footing following the coronavirus crisis, pension liabilities are a deep-seated problem that long predates the pandemic.
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