California state tax isn't equal across the board. The state is more tax-friendly for some residents than others. Residents living in more affordable areas or who have households with incomes below the median California salary face lower tax burdens.
California's reputation as a high-tax state is built in part on generally high prices that make even lower-taxed items result in bigger tax bills. It also has one of the highest sales tax rates in the U.S., especially on gasoline.
[Data for this state tax guide was gathered from a number of sources including the U.S. Census Bureau, the state’s government website, and the Sales Tax Handbook. Property taxes are cited as a rate percentage rather than the assessed value.]
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California State Tax: Income Taxes
Income taxes are more reasonable for some taxpayers. Single filers with $50,000 of taxable income will pay a 6% income tax rate, but a single filer with $70,000 of taxable income will pay the same tax rate (9.3%) as someone making over $300,000. The median household income in California for 2021 was over $80,000, based on U.S. Census Bureau data (opens in new tab), so a good chunk of residents don't enjoy the smaller tax brackets.
California tax on retirement benefits: California does not tax Social Security retirement benefits. Tier 1 Railroad Benefits are also exempt. However, other forms of retirement income are taxable.
There's also a 2.5% California state penalty on early distributions from retirement plans, annuities and IRAs. This is in addition to the 10% federal penalty for early withdrawals.
California Income Tax Range: Single filers or married filing separately
| Up to $10,099 | 1% of taxable income |
| $10,100 to $23,942 | $100.99 plus 2% of income over $10,099 |
| $23,943 to $37,788 | $377.85 plus 4% of income over $23,942 |
| $37,789 to $52,455 | $931.69 plus 6% of income over $37,788 |
| $52,456 to $66,295 | $1,811.71 plus 8% of income over $52,455 |
| $66,296 to $338,639 | $2,918.91 plus 9.3% of income over $66,295 |
| $338,640 to $406,364 | $28,246.90 plus 10.3% of income over $338,639 |
| $406,365 to $677,275 | $35,222.58 plus 11.3% of income over $406,364 |
| More than $677,275 | $65,835.52 plus 12.3% of income over $677,275 |
California Income Tax range: Married filing jointly
| Up to $20,198 | 1% of taxable income |
| $20,199 to $47,884 | $201.98 plus 2% of income over $20,198 |
| $47,885 to $75,576 | $755.70 plus 4% of income over $47,884 |
| $75,577 to $104,910 | $1,863.38 plus 6% of income over $75,576 |
| $104,911 to $132,590 | $3,623.42 plus 8% of income over $104,910 |
| $132,591 to $677,278 | $5,837.82 plus 9.3% of income over $132,590 |
| $677,279 to $812,728 | $56,493.80 plus 10.3% of income over $677,278 |
| $812,729 to $1,354,550 | $70,445.15 plus 11.3% of income over $812,728 |
| More than $1,354,500 | $131,671.04 plus 12.3% of income over $1,354,550 |
California Income Tax Range: Head of household
| Up to $20,212 | 1% of taxable income |
| $20,213 to $47,887 | $202.12 plus 2% of income over $20,212 |
| $47,888 to $61,730 | $755.62 plus 4% of income over $47,887 |
| $61,731 to $76,397 | $1,309.34 plus 6% of income over $61,730 |
| $76,398 to $90,240 | $2,189.36 plus 8% of income over $76,397 |
| $90,241 to $460,547 | $3,296.80 plus 9.3% of income over $90,240 |
| $460,548 to $552,658 | $37,735.35 plus 10.3% of income over $460,547 |
| $552,659 to $921,095 | $47,228.78 plus 11.3% of income over $552,658 |
| More than $921,095 | $88,856.16 plus 12.3% of income over $921,095 |
Note: An income tax credit of up to $1,695 is available if you're at least 65 years old, you qualified as a head-of-household filer for at least one of the past two years, your qualifying person died in the past two years, and your income is less than $89,931.
California Sales Tax
California has a 7.25% state levy. Localities can add as much as 2.5%, and the average combined rate is 8.82%, according to the Tax Foundation (opens in new tab).
Although sales tax is high in California, residents don't need to pay tax on certain items.
- Groceries are tax exempt.
- California banned the "Pink Tax" in 2023.
- Prescription drugs are tax exempt.
How Much Are Property Taxes in California?
In California, the average effective property tax rate is only 0.75%, but the median property taxes paid are still over $4,000 (one of the highest dollar amounts in the country).
California Property Tax Breaks for Retirees
Property Tax Postponement: In California, some homeowners are eligible to defer current year property taxes. Homeowners must meet certain criteria to qualify for the deferment.
- Must be 62 or older, blind, or have a disability.
- Must have at least 40% equity in the home.
- Annual household income must not exceed $51,762.
(Note: Other criteria may need to be met to qualify.)
Base Year Value Transfer: California residents age 55 or older can transfer their home's "tax value" to a new home in the state. If the new home's market value is greater than the old home's market value, the difference is added to the tax value. Generally, three transfers are allowed per person.
California Motor Vehicle Taxes
Motor vehicle sales are taxable at state and local levels. While there is technically no personal property tax on motor vehicles, residents must pay an annual vehicle license fee that is based on the vehicle's value.
California tax on gasoline averages over $0.62 per gallon, which is the highest in the U.S.
California "Sin Taxes"
| Cigarettes | $2.87 per pack |
| Other tobacco products | 61.74% of wholesale price |
| Vapor products | 63.49% of wholesale price plus 12.5% of retail price |
| Beer | $0.20 per gallon |
| Wine | $0.20 per gallon |
| Champagne and sparkling wine | $0.30 per gallon |
| Liquor (up to 100 proof) | $3.30 per gallon |
| Liquor (over 100 proof) | $6.60 per gallon |
| Marijuana | 15% state excise tax (subject to change in 2025) |
California Estate and Inheritance Taxes
There is no estate tax or inheritance tax in California.
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