California Tax Rate Drops in 2017: Sales, Use Tax Lowered on Jan. 1


(Find the current tax rates by California city and county here.)
Yes, you read that headline correctly. A tax in California has actually been lowered. Effective Jan. 1, 2017, the sales and use tax rate dropped in the Golden State.

The rate was lowered one quarter of 1 percent, from 7.50 percent to 7.25 percent, according to the state board of equalization. The lower tax rate is the result of the partial expiration of Proposition 30, a school-funding measure that was approved by voters in 2012 as a temporary means of providing extra money to the state’s schools.

Though the sales tax is now technically lower, in many cities consumers will still pay more than 7.25 percent.

“The decrease in the statewide rate is effective for all cities and counties in California; however, in many jurisdictions in California the actual sales and use tax rate may still be higher than the statewide rate due to the addition of district taxes,” the BOE says.

If you bought something before Jan. 1 and need to return it, the store must provide you with a refund for the old tax rate. And if you bought something before Jan. 1 that wasn’t delivered until after the New Year, the old tax rate remains applicable.

The BOE says that if a retailer continues to charge the old rate, they must either refund the extra money to the consumer, or they can pay it to the board.