Business & Real Estate
By Dale Kasler
December 30, 2016 12:13 PM

Californians are about to enjoy a rare tax cut.

Statewide sales tax rates will fall a quarter-point effective Jan. 1 with the expiration of a temporary tax increase approved by voters four years ago.

The state rate will fall back to 7.25 percent with the start of the new year. However, many local jurisdictions tack on their own sales taxes, so many Californians actually will pay a rate above 7.25 percent.

For instance, Sacramentans will pay 8.25 percent on purchases within the city instead of 8.5 percent. In Sacramento County, the new rate will fall to 7.75 percent.

The decline in sales tax rates was long anticipated. In November 2012, California voters approved Proposition 30, which temporarily raised income tax and sales tax rates. Last month, with the approval of Proposition 55, voters agreed to extend the income tax hikes for 12 years. But the proposition said nothing about keeping the higher sales tax rate, so it’s falling.

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