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California Sales Tax Hike Starts Tomorrow

A Special Notice was sent out by California’s Board of Equalization early this month, alerting taxpayers that the sales and use tax rate in the state of California will increase by 1% on April 1, 2009.

The tax increase is part of voter-approved Proposition 1A, a budget package designed to increase state revenue by $16 billion throughout the next 2 – 3 years. Intended to be a temporary tax, “The 1% tax rate increase will expire on either July 1, 2011, or July 1, 2012, depending upon whether the voters approve the proposed Budget Stabilization constitutional amendment in a statewide election to be held on May 19, 2009”.

All suppliers licensed as Wine Direct Shippers in California are affected by this increase, as payment of sales and use tax is a requirement of the license. The new state tax rate will be raised from 6% to 7%, making the total of all state-wide tax rates, 8.25%. The rate of 8.25% is comprised of three separate taxes, which apply to the entire state: 7.0% “state” tax + 0.25% “county” tax + “combined state and local” tax of 1.0% = 8.25%.

In addition to the 1% state tax increase mentioned previously, there are also some district tax rate updates, which apply to the following cities and counties:

  • The following cities in California have updated their local tax rates: Arcata, Arvin, Campbell, El Cajon, El Monte, Eureka, Galt, La Mesa, La Habra, Oxnard, Pico Rivera, Port Hueneme, Scotts Valley and Trinidad
  • The following counties in California have updated their local tax rates: Amador, Sonoma and Marin

Sales and Use Tax Rate Increases on April 1, 2009

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