Tool | October 2016

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, "sin" products, property, and more -- across the U.S.


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The Bottom Line
Map of California

Least Tax-Friendly

The Golden State is home to movie stars, beautiful beaches and the highest income tax rates in the U.S., putting it at the top of our list of Kiplinger's top ten least tax-friendly states. Californians pay lower property taxes than residents of other high-tax states, but, in a state with some of the highest real estate prices in the U.S., they’re no bargain.

Sales Tax

7.5% state levy. Localities can add as much as 2.5%, and the average combined rate is 8.48%, according to the Tax Foundation. The state sales tax rate is scheduled to decrease to 7.25% on January 1, 2017.

Income Tax Range

Low: 1% (on up to $15,700 of taxable income for married joint filers and up to $7,850 for those filing individually)

High: 13.3% (on more than $1,052,886 for married joint filers and $1 million for those filing individually)

See’s Retiree Tax Map to learn how California taxes Social Security income and other forms of retirement income.

Motor Fuel Taxes

Gasoline: $0.38 per gallon.
Diesel: $0.39 per gallon.

Property Taxes

Median property tax on California's median home value of $412,700 is $3,160, according to the Tax Foundation.

See’s Retiree Tax Map for details on tax breaks for seniors in California.

Vehicle Taxes

California charges an annual fee that functions much like a property tax. The rate is 0.65% of the actual purchase price and is reduced for the first 11 years of ownership. For example, the VLF on a two-year-old vehicle purchased for $25,000 would be $147.

Sin Taxes

Cigarettes: $0.87 per pack (a ballot initiative to be voted on in November 2016 could raise this to $2.00)
All other tobacco products: 28% of the wholesale price

Beer: $0.20 per gallon
Wine: $0.20 per gallon ($0.30 for sparkling wine)
Liquor: $3.30 per gallon

Travel Taxes

Hotel: No statewide lodging tax, but cities and other localities can levy taxes. For example, the city of Long Beach has a 12% rate. The city of Anaheim has a 15% rate. Sales tax isn't collected.

Rental cars: No statewide tax, but localities may levy them. Sales tax is due.

Taxes On Wireless Service


Inheritance and Estate Taxes

There is no inheritance tax or estate tax.

Oddball Tax

High-proof tax: If your alcohol is more than 100 proof, the liquor tax doubles, to $6.60 per gallon. So, watching the sun go down with a barrel-proof bourbon is going to set you back a bit more in California.

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