California Tax Guide
13.3%top marginal rate
California has the highest state income tax rate in the nation at 13.3% on income over $1 million. Sales taxes are also high. However, Proposition 13 keeps property taxes relatively low for long-term homeowners. No estate tax.
California Tax at a Glance
Income Tax
13.3%
Top marginal rate
Sales Tax
7.25%
State-level rate
Property Tax
0.74%
33% below the national average
Estate Tax
No
No state estate tax
How California Compares to the National Average
Notable Tax Facts
- Highest state income tax rate in the US at 13.3%
- Proposition 13 caps property tax increases at 2% per year from purchase price
- State sales tax of 7.25% is the highest base rate in the nation
- Despite high taxes, California's GDP would rank as the 5th largest economy in the world
- No estate or inheritance tax
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California Tax FAQ
What is California's income tax rate?
California has a progressive income tax with rates from 1% to 13.3%. The top rate of 13.3% applies to income over $1 million and is the highest state income tax rate in the US.
Why do people stay in California despite high taxes?
California offers a massive economy, tech industry jobs, year-round weather, cultural diversity, and world-class universities. Many high earners find the lifestyle and career opportunities worth the tax premium.
How does Prop 13 affect property taxes?
Proposition 13 limits property tax to 1% of the purchase price, with annual increases capped at 2%. This means long-term homeowners pay far less than recent buyers on comparable homes.
Does California tax capital gains differently?
No. California taxes capital gains as ordinary income, meaning long-term capital gains can be taxed at up to 13.3% at the state level — on top of federal capital gains tax.
Does California have an estate tax?
No. California does not have a state estate tax or inheritance tax.
Compare With Other States
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Read moreEducational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.