By Michael P. Neufeld
Mountain Communities — Residents will pay an extra quarter percent sales tax beginning January 1.
California voters approved Proposition 30, a Sales and Income Tax Increase Initiative, on November 6 that raises the state’s sales tax to 7.5% from 7.25%, which amounts to a 3.45% increase over the current rate. It will be in effect through December 31, 2016.
BUT WAIT…San Bernardino County residents already pay 7.75% sales tax so the increase will become 8% countywide, except for the City of San Bernardino where the rate will be 8.25%.
The bump upwards will mean mountain residents will pay more for taxable purchases made in local retail outlets, for mail order items and Internet purchases.
The Franchise Tax Board reports the increase is not applicable to gasoline purchases. But for mountain residents utilizing diesel fuel the rate will increase the extra quarter of a percent.
In addition to the sales tax hike, Proposition 30 will also have an impact on the top three percent of the state’s taxpayers, according to the Franchise Tax Board.
HIGH-INCOME TAX BRACKETS – The initiative created four high-income tax brackets for Californians with taxable incomes exceeding $250,000, $300,000, $500,000 and $1,000,000. The brackets will be in place until December 31, 2020.
Here’s the breakdown by bracket:
* $250,000 – $299,999 – Imposes a 10.3% tax rate which amounts to an increase of 10.6% over the current rate of 9.3%.
* $300,000 – $499,999 – Imposes an 11.3% tax rate which amounts to an increase of 21.5% increase over the current rate of 9.3%.
* $500,000 – $999,999 – Imposes a 12.3% tax rate which amounts to a 32.26% increase over the current rate of 9.3%.
* Over $1,000,000 – Imposes a 13.3% tax rate which amounts to a 29.3% increase over the current “millionaires tax” rate of 10.3%. (704)