Politics & Government

Sales Tax, Vehicle License Fees Drop Today; Time to Go Shopping?

Statewide, the sales tax dropped 1 percentage point today, and the annual vehicle license fee dropped half a percentage point. On the flip side, customers buying online through Amazon may have to start paying sales tax.

There is, at least, one piece of the new state budget package that consumers are likely to appreciate: a 1 percentage point drop in the sales tax.

That translates to one less penny in sales tax for every dollar spent. 

The legislature failed to extend a tax rate increase that would have kept the statewide base tax rate at 8.25 percent. It drops to 7.25 percent effective today.

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Shoppers in Newark will now pay 8.75 percent sales tax instead of the 9.75 percent they had been paying.The same goes for Fremont.

In Union City, tax decreases to 9 percent instead of the 10 percent consumers have been paying since .

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El Cerrito is the only other Bay Area city with the same tax rate as Union City.

In Los Angeles County, several cities that also approved tax increases have a 9.25 percent sales tax rate effective today. However, the highest current tax rates in the state remain in Pico Rivera and South Gate, both in Los Angeles County, which have sales and use tax rates of 9.75 percent, according to the Board of Equalization.

For a full list of tax rates in the state, visit the Board of Equalization website.

If you tend to shop online with the likes of Amazon.com, however, you may be paying more sales tax.

As part of the state budget package, Amazon is supposed to start collecting 7.25% base tax on online purchases. However, the retailer has thus far refused, instead protesting by severing ties with California retailers who send customers to their site, the Los Angeles Times reports.

"This legislation is counterproductive and will not cause our retail business to collect sales tax for the state," Paul Misener, Amazon's vice president of global public policy, told the Times. 

Amazon is expected to sue. 

Vehicle Licence Fees Drop

Also starting July 1, the annual vehicle license fee drops a half a percentage point, from 1.15 percent of a car's value to 0.65 percent. 

That translates to an extra $75 in your pocket on a vehicle worth $15,000. 

At the same time, expect to pay $12 more for your annual vehicle registration fee. But if your car is worth more than $2,400, you'll be paying fewer taxes on it overall, according to the Los Angeles Times.


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