California State Sales Tax Rate Decreases on January 1, 2017

On January 1, 2017, California’s state sales and use tax rate will decrease 0.25% from 7.5% to 7.25%. Note that this rate includes the statewide county tax of 1.25%, so the true California state sales and use tax rate is decreasing from 6.25% to 6%. The state had implemented a temporary sales tax rate increase of 0.25% from January 1, 2013 through December 31, 2016. The lower rate applies for sales that occur after January 1, 2017. This is deemed to be date of delivery unless the contract stipulates that title transfer occurs at an earlier date. In addition, for fixed rate contracts, the rate reduction applies – even if the contract was entered into prior to the rate change. This rate change also impacts the partial exemption under the manufacturing provisions. For additional information on how the rate decrease affects partial exemptions and other items, visit the California BOE webpage. (Special Notice L-475, California State Board of Equalization, October 2016)

Posted on December 4, 2016