California Residents, Did You Notice?

On January 1, 2017, the state portion of the sales and use tax in California decreased one quarter of one percent from 7.50%  to 7.25%. The decrease is statewide.  Residents in locations where an additional district tax is imposed will notice a .25% decrease in their tax rate, even though their rates are still above the new state amount of 7.25%.  

The drop in the sales tax rate is due to an expiration of a provision in Proposition 30, which temporarily increased the state sales and use tax rate by .25% to help maintain funding levels for public schools and colleges, among other projects.

To find the new rate for a specific location, visit the BOE’s  Find a Sales and Use Tax Rate webpage and enter the address when prompted.

If you are a business owner and have inadvertently collected tax at the higher rate after the first of the year, you must either refund the excess tax to your customers or pay the excess to the BOE.  If you have paid the excess tax to the BOE and wish to refund your customers, you can request a refund from the BOE by completing form BOE-101, Claim for Refund or Credit.

With returned merchandise, the customer should be refunded the amount of tax at the rate that was charged and collected at the time of the original sale.  Any specific questions can be answered by visiting the BOE website or calling the customer service center at 1-800-400-7115.