At least until July 1st, if you can. It is on this day that the sales tax rate in the State of California is reduced by 1 percentage point. In the Oroville, Paradise, and Chico areas this means that our sales tax goes from the current rate of 8.25% down to 7.25%.
The higher rate was imposed upon California by our legislature and Governor on April 1, 2009 in the hopes of helping close the budget gap caused by the out of control spending of our “state leaders.” As usual, raising taxes only made matters worse. But enough about politics.
With the expiration of the current increased tax rate only two weeks away (unless it is somehow extended) it is wise to consider putting of any non-essential purchase until the new rate takes effect. Consider the savings you will enjoy by putting off the purchase of that new car you are about to buy. By simply waiting a mere two weeks you can save yourself $200 in sales tax for a $20,000 car and $300 in taxes for a car that costs you $30,000. Heck, that is like getting a free tank of gas 🙂 Speaking of cars, you can also save on registration fees if you put your purchase off until July 1st because vehicle registration fees are also being rolled back then.
The reduction in the sales tax is going to be good for the economy of a state struggling to get back on its economic feet by leaving consumers with more money in their pockets that will most likely be spent on other things. For example, the overall price on a gallon of gas will be reduced by the reduction in the sales tax. At today’s price of $3.77 per gallon at the corner AM/PM you will save almost 4cents per gallon with the new (or should I say old) rate.
If it is at all possible for you to put off that taxable purchase until July 1, then I say do it and keep more of YOUR money.
- Calif. legislators OK online sales tax, and that means Amazon(bizjournals.com)
- California Democrats send budget to Brown(bendbulletin.com)
- California Lawmakers Pass No-Tax Budget as Deadline Looms(businessweek.com)
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