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Introducing Our New Online Tax Guide for Local and District Taxes

Sales Taxes

The California Department of Tax and Fee Administration (CDTFA) has created a new online tax guide, Local and District Tax Guide for Retailers. The guide helps to assure you collect, report, and pay the correct tax rate for each transaction.

New online guide overview

The CDTFA understands that allocating local tax and determining whether district tax applies to your sales or use tax transactions can be complicated. This new online guide is intended to help you properly allocate local tax and determine how district taxes apply to your business transactions. The guide contains helpful examples and important local tax and district tax information for retailers such as lessors, construction contractors, those with multiple locations, those making sales over the Internet, those making sales into California from out‑of‑state, and more.

What is local tax?

Local taxes are imposed by local jurisdictions, usually cities or counties. Sales and use tax transactions are allocated to the city or county where the sale or use occurs. The one (1.00) percent “Local Jurisdiction” portion goes to the city or county where the sale or use occurs. The one quarter (.25) percent “Local Transportation Fund” portion always goes to the county where the sale or use occurs.

What is district tax?

District taxes are voter-approved transactions (sales) and use taxes imposed by cities, counties, and other local jurisdictions (district). District tax rates are added to the current 7.25 percent statewide sales and use tax rate making the tax rate higher in some districts.

Find your tax rate

You can find all the tax rates in the state on our website. Please see our California City and County Sales and Use Tax Rates. To find a sales and use tax rate by address, select the link Look up the current sales and use tax rate by address. Be sure the address information you input is the address you intended. The tax rate given will reflect the current rate of tax for the address entered.

Tax reform brought significant changes to itemized deductions

Tax reform brought significant changes to itemized deductions

Tax law changes in the Tax Cuts and Jobs Act affect almost everyone who itemized deductions on tax returns they filed in previous years..  One of these changes is that TCJA nearly doubled the standard deduction for most taxpayers. This means that many individuals may find it more beneficial to take the standard deduction. However, taxpayers may still consider itemizing if their total deductions exceed the standard deduction amounts.

Here are some highlights taxpayers need to know if they plan to itemize deductions:

Medical and dental expenses
Taxpayers can deduct the part of their medical and dental expenses that’s more than 7.5 percent of their adjusted gross income.

State and local taxes
The law limits the deduction of state and local income, sales, and property taxes to a combined, total deduction of $10,000. The amount is $5,000 for married taxpayers filing separate returns. Taxpayers cannot deduct any state and local taxes paid above this amount.

Miscellaneous deductions
The new law suspends the deduction for job-related expenses or other miscellaneous itemized deductions that exceed 2 percent of adjusted gross income. This includes unreimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel.

Home equity loan interest
Taxpayers can no longer deduct interest paid on most home equity loans unless they used the loan proceeds to buy, build or substantially improve their main home or second home.

More information:
• Publication 5307, Tax Reform: Basics for Individuals and Families
• Publication 501, Standard Deduction, and Filing Information
• Schedule A, Itemized Deductions
• IRS Tax Map

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