Sales Tax Rate Increase Kicks in January 1, 2002
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NR# 63-G
Date: December 24, 2001 Customer & Taxpayer Service Division Sales Tax Rate Increase Kicks in January 1, 2002 Sacramento. The State Board of Equalization (BOE) reminds retailers and consumers that the quarter percent statewide sales and use tax rate increase takes effect in just a few days. "For consumers this can mean a significant difference on the final price of a large ticket item and for retailers this means changing those registers and obtaining the correct tax charts prior to opening for business on January 1, 2002," stated James Speed, Executive Director of the BOE. Effective January 1, 2002, the minimum combined state, county, and local sales and use tax rate will increase from 7 percent to 7.25 percent. Consumers and retailers are also reminded that 7.25 percent is not necessarily the maximum rate. Sales and use tax rates are higher in cities and counties that have special tax districts, such as library and transportation tax districts. According to the BOE, the rate is increased due to an automatic trigger based on the state General Fund reserves. Under the Revenue and Taxation Code, the State General Fund portion of the sales and use tax rate is to increase by a quarter percent on January 1, 2002, if the general fund reserve is less than 3 percent of revenues excluding the revenues derived from the quarter percent sales and use tax rate, and the actual general fund revenues for the period May 1, 2001, through September 30, 2001, do not equal or exceed the May Revision. The California Department of Finance has determined both of these conditions have been met which subsequently triggers the increase. For Assistance |