| Taxes in California fall into three categories. There are | | | | gift wrapped the gift wrapping service may be taxed |
| taxes on income, on property, and on sales. | | | | but the food itself exempt. |
| Let us look first at income tax. This is paid on personal | | | | Taxes are payable on real estate in California. But |
| income. It is a progressive tax that varies according to | | | | there are many exemptions. Those who think they |
| the size of the income. There are six tax bands. On | | | | may be able to claim an exemption should apply to the |
| the first $6,622 of taxable income 1% tax must be | | | | local County Tax Assessor's office for information. |
| paid. This goes up to 2% for the next tax band | | | | Some homesteads are exempt from local property |
| between $6,623 and $15,698. The third tax bracket, | | | | taxes. Disabled citizens and senior citizens may be |
| $15,699 and $24,776, pays 4%. It is 6% on incomes | | | | eligible for tax postponement. This applies to their |
| between $24,777 and $34,394 and 8% on incomes | | | | principal residence only. It involves recording a lien |
| between $34,395 and $43,467. Above that level tax is | | | | against the property. Interest is charged on the |
| payable at 9.3%. | | | | postponed tax.There is also an assistance program for |
| In addition there is a 1% surcharge on incomes over $1 | | | | eligible home owners and renters. It consists of a once |
| million. This makes the highest income marginal tax rate | | | | a year payment that is based on a proportion of the |
| 10.3% in California. | | | | tax payable on their homes or included in their rent. |
| Tax returns must be submitted by April 15 every year. | | | | There are no inheritance taxes in California. Estate tax |
| They should be made on Form 540EZ, Form 540A | | | | is being brought into line with changes in federal estate |
| (short form), Form 540 (long form) or Form 540-ADS. | | | | tax law and is currently being phased out. For people |
| Couples can file joint tax returns. In this case the | | | | who died after January 1 2005 there is no need to file |
| allowances for each tax bracket are doubled. | | | | an estate tax return. |
| Sales tax varies across California. In January 2002 it | | | | There are no intangible personal property taxes in |
| was generally 7.25%. This figure includes state, county | | | | California. Only real estate is liable for taxation under |
| and local sales taxes. The state component is 6.25%. | | | | California taxation law. |
| But in some cities and counties with their own powers | | | | More details can be found on the California Franchise |
| of taxation it may be higher. | | | | Taxboard Website. The state's instruction book will |
| What is regarded as taxable may vary from business | | | | explain about the exemptions that are allowable and |
| to business. Gift wrapping may or may not be counted | | | | what refunds can be claimed. The instruction book also |
| as a taxable item for sales tax purposes. Some | | | | explains the program of voluntary fund contributions |
| businesses treat it as a non taxable item. when food is | | | | that can be made by California citizens. |