Effective Jan. 1, 2017, the sales and use tax rate dropped in the State of California by 0.25%. The rate was lowered one quarter of a percent, from 7.50% to 7.25%, according to the state Board of Equalization (BOE).
This lower tax rate is the result of the partial expiration of Proposition 30, a school-funding measure that was approved by voters in 2012 as a temporary means of providing extra money to the state’s schools.
Though the sales tax is now technically lower, in many cities consumers will still pay more than 7.25% due to City and County measures.
“The decrease in the statewide rate is effective for all cities and counties in California; however, in many jurisdictions in California the actual sales and use tax rate may still be higher than the statewide rate due to the addition of district taxes,” the BOE says.
You can look up your sales tax rate by address using this resource: https://maps.gis.ca.gov/boe/TaxRates/.
If you sold something before Jan. 1 and need to refund it, you must provide the refund with the old tax rate. The BOE also states that if you continue to charge the old tax rate, you must either refund the extra money to the consumer, or you can pay it to the board.
These changes will need to be made in your point of sale software.
For assistance in making these changes or any questions regarding these new rates please reach out us here: KROSTCPAs.com/contact.