State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

California State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

California

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The Bottom Line
Flag of California

Most-Tax Friendly

The Golden State's reputation as a high-tax destination is built in part on how aggressively it goes after big earners, with a 13.3% tax rate that kicks in at $1 million (for single filers) of taxable income. But the state's brackets are very progressive, so for more modest incomes, the impact is far milder. It's a similar story with property taxes, which in wealthy areas like Silicon Valley are high (and much lamented). Using a statewide average, though, California's property taxes are only the 16th-highest in the country. Where do Californians pay high taxes? On gasoline, for one.

Income Tax Range

Low: 1% (on up to $17,864 of taxable income for married joint filers and up to $8,932 for those filing individually)

High: 13.3% (on more than $1,198,024 for married joint filers and $1 million for those filing individually)

Sales Tax

7.25% state levy. Localities can add as much as 2.5%, and the average combined rate is 8.82%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In California, the median property tax rate is $729 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 63.05¢ per gallon (63.65¢ effective July 1, 2021).
Diesel: 83.06¢ per gallon (83.46¢ effective July 1, 2021)
(Both rates are the highest in the country).

Sin Taxes

Cigarettes: $2.87 per pack
All other tobacco products: 63.49% of wholesale cost
Vapor products: $0.05 per ml of consumable product

Beer: $0.20 per gallon
Wine: $0.20 per gallon ($0.30 per gallon for champagne and sparkling wine)
Liquor: $3.30 per gallon (100 proof or less); $6.60 per gallon (over 100 proof)

Marijuana: Retail sales are taxed at 15% by the state; local taxes may also be due. Cultivators are taxed $9.65 per dry-weight ounce of cannabis flower, $2.87 per dry-weight ounce of cannabis leaf, and $1.35 per ounce of cannabis plant.

Annual Car Taxes and Fees

An annual vehicle license fee based on the car's purchase price or value is imposed. You can deduct the fee from your income tax. The fee is reduced for the first 11 years of ownership.

Estate and Inheritance Taxes

No estate or inheritance tax.


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