It is now April 1st! Yes, the California sales tax rate has increased to 8.25% as previously announced.
One Penny Equals 14%
Funny (well maybe not) how when describing the sales tax hike they say it is increasing by a penny, or 1% of each dollar. Well the reality of it is that for every $100 taxable purchase you pay $8.25 in taxes instead of $7.25...this $1 increase represents a 14% tax hike! OUCH!
The "good" news is that most of Ventura County will be limited to 8.25%. Our neighbors in the L.A. County portion of Westlake Village, Agoura and Calabasas will pay 9.25%.
The cities of Oxnard and Port Hueneme will charge 8.75% sales taxes on 4/1. The extra .5% was approved by voters in November. Hmmm, I wonder if this would have been approved had they known another statewide increase was coming. A double whammy! As a result, sales taxes in Oxnard and Port Hueneme effectively are increasing by 21%!!!
It could be worse. The highest rate in California is 10.25% in Pico Rivera and South Gate. Dear PR and SG residents: Thousand Oaks is only 60 miles away. Drive here to save taxes on big ticket purchases! (NOTE: A very smart friend of mine pointed out an inaccuracy in the original post...that vehicles are taxed based on the city/county the car is registered in...not the city of purchase. Thank you for that key clarification!)
The Trend is Not Your Friend
The California State Board of Equalization website is not ashamed (nor am I) to publish the following history of sales tax rates:
- 8/1/33: 2.5%
- 7/1/35: 3%
- 7/1/43: 2.5% (nice!)
- 7/1/49: 3%
- 1/1/62: 4% (owww...a 33% increase)
- 8/1/67: 5% (another 25%)
- 7/1/73: 6% (20% increase)
- 10/1/73: 5% (back down only 3 months later)
- 4/1/74: 6% (and back up we go)
- 12/1/89: 6.25% (not bad...15 1/2 years and only .25% increase)
- 1/1/91: 6% (very nice)
- 7/15/91: 7.25% (prior drop was a major head fake)
- 1/1/01: 7%
- 1/1/02: 7.25%
- 4/1/09: 8.25%
California sales tax rates have more than tripled since they were born in 1933. That trend line ain't looking too good.
This latest increase they say will expire on either 7/1/01 or 7/1/12, depending upon whether we approve a "Budget Stabilization constitutional amendment" in a statewide election on May 19th. I attempted to decipher what this amendment is but was unsuccessful. I will try again once the details are published.