Local Sales Tax Cut

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Post-holiday sales are in full swing at retailers and, as of New Year’s Day, shoppers receive even more savings.

Newport Beach sales tax returned to its pre-2012 amount of 7.75 percent thanks to a statewide decrease. The Schools and Local Public Safety Protection Act of 2012 (also known as Proposition 30), imposed a 0.25 percent increase, which expired on Dec. 31.

The act was designed to provide funding for public schools and colleges, as well as pay for programs for senior citizens and low-income families. It also funded local governments to comply with a statewide law that moved lower-level offenders from state prisons to county jails.

In 2016, voters approved an extension of the act for income tax only for wealthy Californians, which was another provision of Proposition 30.

Newport Beach has only a slightly higher tax rate than the state percent of 7.25 (down from 7.5) that affects all cities and counties in California.

The highest tax rates in Orange County are in the city of La Habra at 8.25 percent and the city of Stanton at 8.75 percent. The rest of Orange County cities charge 7.75 percent.

According to the California State Board of Equalization, a retailer who charges the higher sales tax rate this year must either refund the excess amount to the buyer or pay the excess tax to the board of equalization.

At the Newport Beach Chamber of Commerce meeting on Thursday, no retailers experienced issues with resetting their cash registers or other devices to the new lower tax rate.

For more information, visit boe.ca.gov.


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