New Year, New Taxes Thanks to Props 30, 39

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Credit Photo used under Creative Commons from Andy Patterson / Modern Relics / http://www.flickr.com/photos/modernrelics/4461010654/

The California capitol building in Sacramento (file photo)

California taxes are going up in the new year – with higher sales and income tax rates … and a new requirement for out-of-state businesses to calculate their taxes the same way in-state businesses do.  

In November, voters approved two ballot measures that deal with taxes.  Proposition 30 raises the sales tax a quarter of a cent to 7.5 percent, starting in the new year 

It also raises the income tax on Californians earning at least 250-thousand-dollars a year by up to three percent.  That increase begins with the 2012 tax year, meaning it’ll be in effect for tax returns filed this coming April.

Meanwhile, businesses headquartered outside California will also be dealing with a change in tax law.  They’ll need to use the same formula to calculate their taxes as in-state businesses,  instead of using a different, more beneficial formula as they have in the past. 

The first payments under the Prop 39 rules will also be due in April.