California has a graduated state individual income tax, with rates ranging from 1.00 percent to 13.30 percent. An additional payroll tax on wage income brings the top rate to 14.6 percent on wage income—the highest combined income tax rate in the United States. California has an 8.84 percent corporate income tax rate, a 7.25 percent state sales tax rate, and an average combined state and local sales tax rate of 8.99 percent. California has a 0.70 percent effective property tax rate on owner-occupied housing value. California does not have an estate tax or inheritance tax. California’s gas tax is 70.92 cents per gallon, and its cigarette excise tax is $2.87 per pack of 20 cigarettes.
California raises tax revenue primarily through individual income taxes (27.5 percent of total state and local tax revenue), property taxes (26.3 percent), and general sales taxes (21.5 percent). California collects $8,942 in state and local tax collections per capita, carries $14,812 in state and local debt per capita, and has an 84 percent funded ratio of public pension plans. California’s tax system ranks 48th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and California is no exception. Use the tabs below to compare California taxes with other states and to see how California raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: 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.
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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.
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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?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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Among the 46 states that held legislative sessions this year, structural state tax reform and temporary tax relief measures were recurring themes.
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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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Although the majority of state tax changes take effect at the start of the calendar year, some are implemented at the beginning of the fiscal year. Fourteen states have notable tax changes taking effect on July 1.
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The Kansas experience is so infamous that “what about Kansas?” is almost guaranteed to be a question—sometimes as a retort, but often a genuine expression of concern—any time any state explores tax relief. But what about the other two dozen states that have cut their income taxes since then?
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Which states have the highest property taxes in 2022? See how your state compares in property taxes across the United States
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The sales tax is too important a part of states’ revenue toolkits to be permitted further erosion, making sales tax modernization a vital project of the 2020s.
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Ranking unemployment insurance tax codes on the 2022 State Business Tax Climate Index. Learn more about state unemployment insurance tax code and systems.
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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.
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After a whirlwind of cuts and reforms in 2021, it looks like 2022 might be an even bigger year for state tax codes. Republican and Democratic governors alike used their annual State of the State addresses to call for tax reform, and there is already serious momentum from state lawmakers nationwide to get the job done.
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States are flush with cash, but taxpayers’ purchasing power is being eroded by high inflation. Tax rebates, gas tax holidays, and other temporary tax expedients have the potential to add to existing inflation—but good intentions do not always make for good policy.
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