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
While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts—especially as a large number of major cities have combined rates of 9 percent or more.
6 min read
Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.
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Though gas taxes are intended to serve as user fees and pollution deterrents, they vary widely across states. How does your state’s burden compare?
4 min read
According to recent reports, 72 percent of the current marijuana market in the US is illicit. Evidently, the federal criminalization of marijuana has failed to prevent its sale or consumption.
6 min read
As much as 98 percent of vaping products sold in the US are illicit. Most states levy an excise tax on vaping products, but these tax systems vary substantially. The result is a messy tax system covering largely illicit products, and no one knows whether taxes are being collected and remitted on most products sold nationwide.
7 min read
However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
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An ideal sales tax is imposed on all final consumption, both goods and services, but excludes intermediate transactions to avoid tax pyramiding.
15 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).
8 min read
The data extraction mitigation fee is modeled after Maryland’s digital advertising tax, which has been mired in litigation since its inception and is very likely unconstitutional and in conflict with federal law.
6 min read
Summer has arrived and states are beginning to implement policy changes that were enacted during the legislative session (or are being phased in over time).
13 min read