State Tax Increases Expire, Rates Return To Pre-2009 Levels
LOS ANGELES (CBS) — Californians are getting some tax relief, thanks to the expiration Friday of tax increases enacted more than two years ago.
In February 2009, following the Legislature's approval, then-Gov. Arnold Schwarzenegger signed into law an emergency budget that hiked the vehicle license fee from 0.65 percent to 1.15 percent and bumped up sales tax rates by 1 percent and personal income tax rates by a quarter percent.
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State income tax rates reverted to pre-2009 levels in January, and the VLF and sales tax rates fell back Friday.
"This is going to be real money, tangible money in the hands of everday people," said Assemblyman Allan Mansoor Friday at a press conference.
Lawmakers anticipate that the cuts will save California families $1,000 a year.
Car dealers are hoping it will spur a weekend of big sales over the Independence Day holiday.
"When you're talking about the sales tax on a $30,000 to $40,00o car, you can expect it to go down $300 or $400 plus the licensing fee going down," said Orange Coast Chrysler Jeep Owner John Gray.
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