In 2012, voters approved Proposition 30, a temporary rise in California sales tax to fund education initiatives. With voter approval, the sales tax rose from 7.25 percent to 7.50 percent. That temporary sales and use tax imposed by Prop 30 expires on Saturday, Dec. 31, 2016.
As a result, effective Sunday, Jan. 1, 2017, the statewide use and tax rate will return to its pre-2016 rate of 7.25 percent.
However, the State Board of Equalization cautions that the total tax rate in many cities and counties will remain higher than the statewide rate because of locally approved district taxes in those areas.
For Riverside County, sales tax beginning Jan. 1, 2017, will be 7.75 percent.
A retailer who continues to charge the pre-2017 rate must refund the excess to customers. If a customer believes they have overpaid tax, they may request a refund from the Board of Equalization. See publication 117 (www.boe.ca.gov/formspubs/pub117/) for details.
In general, the appropriate tax rate applies as of the date of sale. And date of sale is generally defined as time of delivery, unless the contract of sale specifies otherwise. Therefore, if the contract of sale does not specify when title passes, most retail sales of merchandise delivered to customers on and after Jan. 1, 2017, are subject to the lower tax, 7.25 percent plus any applicable district taxes.
The statewide sales and use tax decrease does not affect sales and use tax rates for gasoline motor vehicle fuel, however, it does affect tax rates for diesel fuel and aircraft jet fuel.