State sales tax hike starts with new year | TheUnion.com
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State sales tax hike starts with new year

With state revenues on the skids, a quarter-cent sales tax hike is set to go into effect today.

The increase will put Nevada County’s sales tax rate at 7.375 percent.

But the money won’t go to county coffers, said Laura Matteson, the county’s senior administrative analyst.



The state will use the money to help bridge a $12.4 billion deficit in the coming fiscal year, she said.

Under the terms of a 1991 law amended by the California Legislature last summer, the quarter-cent tax automatically goes into effect when state budget reserves fall below 3 percent.




A year ago, when the state had a budget surplus, the tax rate went down the same amount.

But that was before last summer’s energy crisis and the post-Sept. 11 attacks war on terrorism, both of which have had big effects on the state’s economy and budget surplus, Matteson said

The quarter-cent sales tax hike is expected to generate $1.1 billion a year in revenue and cost the average family of four about $120 annually.


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