New California Budget to Bring Tax Increases

by

Via Spidell Publishing

Early this morning, after all night sessions, the California legislature passed a budget package for the 2008-09 and 2009-10 fiscal years which is expected to be signed by the Governer.

Higlights of the major tax changes include:
• Sales and use tax rate increase by 1%, starting April 1, 2009;
• Increase in the personal income tax rates by 0.25% or 0.125% depending on federal stimulus revenue;
• Dependent exemption credit decrease to the same amount as the personal exemption credit, for the 2009 and 2010 taxable years;
• Vehicle license fee increase by 1% and vehicle registration fee increase by 0.15%, starting May 19, 2009;
• New homebuyer credit;
• Tax credits for the entertainment industry;
• Tax credit for small businesses (under 20 employees) hiring new employees; and
• Single sales apportionment factor.

Missing from the final package is:
• Gas tax increase (originally included in the assembly version but removed in the final version);
• 5% surtax (originally included in the assembly version but removed in the final version);
• Sales tax on services (discussed and included in earlier versions of the bill); and
• Withholding on independent contractors (which had been under serious consideration).

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One Response to “New California Budget to Bring Tax Increases”

  1. Todd Yates Says:

    • Tax credits for the entertainment industry;

    YEAH!!

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