California sales tax to drop in 2017

Californians will be getting a tax break in 2017. The state’s sales and use tax rate will drop one quarter of one percent on December 31, 2016, when a temporary tax hike approved by California voters in 2012 expires.

According to the State Board of Equalization, the sales and tax rate will drop from 7.50 percent to 7.25 percent. The decrease is effective for all cities and counties, although the actual sales and use tax rate may still be higher in some communities due to additional local district taxes.

The state’s sales and use tax was raised when California voters approved Proposition 30 in November 2012. The measure called for a temporary tax hike to prevent $6 billion in cuts to public education.

Proposition 30 also provided for an increase in the income tax rate for California residents with an annual income over $250,000. The higher income tax rate was extended an additional twelve years when voters passed Proposition 55 in November 2016.