As most of California is aware, Proposition 30 passed on November 6 which will increase the sales tax as of January 1, 2013. The minimum sales tax will now be 7.5%, but many counties have a tax rate higher than that due to prior approved tax increases for their specific counties (and even some cities have rates higher than their county due to voter approval for increases.) If you are doing your bookkeeping, make sure you update your tax rates before generating your first invoice in 2013 (1/4% increase).
Although I don’t do income tax returns, I’ll include the income tax increase information here as well. Proposition 30:
- Creates four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000, and $1,000,000. This increased tax will be in effect for 7 years.
- Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000–a percentage increase of 10.6% over the current policy of 9.3%. The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income.
- Imposes an 11.3% tax rate on taxable income over $300,000 but less than $500,000–a percentage increase of 21.5% over the current policy of 9.3%.
- Imposes a 12.3% tax rate on taxable income over $500,000 up to $1,000,000–a percentage increase of 32.26% over the current policy of 9.3%.
- Imposes a 13.3% tax rate on taxable income over $1,000,000–a percentage increase of 29.13% over the current “millionaires tax” policy of 10.3%.
- The income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).
- Based on California Franchise Tax Board data for 2009, the additional income tax is imposed on the top 3% of California taxpayers.
Let’s hope CA uses these funds properly based on what they said they would do (fund education). It seems many times propositions are passed, but funds are not used as specifically stated (there always seems to be a loophole.) I’m interested to see if the schools actually get all that is estimated and if it will help turn the failing educational system around. Let’s hope so, otherwise it was just another tax increase that has done no good.
The facts in this post can be found at http://ballotpedia.org/wiki/index.php/California_Proposition_30,_Sales_and_Income_Tax_Increase_(2012)
Candy
