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. An additional payroll tax on wage income brings the top rate to 14.4 percent on wage income. 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 8.98 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 has a 70.92 cents per gallon gas tax rate and a $2.87 cigarette excise tax rate (per pack of 20 cigarettes). The State of California collects $10,319 in state and local tax collections per capita. California has $14,273 in state and local debt per capita and an 81 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. The first step toward 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 2025: 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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