Thursday, November 8, 2012

Recap of CA Propositions Effecting your Taxes

Proposition 30

California voters approved Proposition 30, which increases personal income tax on annual earnings over $250,000 for seven years and increases the sales and use tax rate by 0.25¢ for four years.

Below are the new rates:

10.3% (1% increase) on income of:  $250,001–$300,000 for single/MFS;
                                                     $340,001–$408,000 for HOH; and
                                                     $500,001–$600,000 for MFJ.

11.3% (2% increase) on income of:  $300,001–$500,000 for single/MFS;
                                                     $408,001–$680,000 for HOH; and
                                                     $600,001–$1,000,000 for MFJ.

12.3% (3% increase) on income of:  More than $500,000 for single/MFS;
                                                     More than $680,000 for HOH; and
                                                     More than $1,000,000 for MFJ.

Proposition 38

Voters rejected Proposition 38, which would have increased personal income tax rates on annual earnings over $7,316 using a sliding scale from 0.4% for lowest individual earners to 2.2% for individuals earning over $2.5 million, for 12 years.

Proposition 39

Voters approved Proposition 39, which provides that, starting in 2013, multistate businesses are no longer allowed to choose the method for determining their state taxable income that is most advantageous for them. Instead, most multistate businesses must determine their California taxable income using the single sales factor method. Businesses that operate only in California are not affected by this measure. This measure includes rules regarding how all multistate businesses calculate the portion of some sales that are allocated to California for state tax purposes, including a set of specific rules for certain large cable companies.