San Diego Tax

San Diego tax administration for business and transient occupancy tax is a function of the City Treasurer. The City of San Diego assesses a business tax on any business that operates within the city limits. All businesses, including home-based, self-employed, and independent contractors, are required to obtain a Business Tax Certificate. The City’s Treasurer’s Business Tax Program administers the city’s collection and enforcement of business and rental unit tax revenue. Revenues collected by this tax go to street maintenance, libraries, city services, parks, and police and fire protection, all which are covered with the city’s general fund. Businesses should also register for a seller’s permit, so they can collect sales and use tax and report it to the state.

The City’s Treasury office has the responsibility for the collection of the Tourism Marketing District (TMD) and Transient Occupancy Tax fees. The transient occupancy tax is made up of 10.5% of taxable rent collected, and the TMD assessment amounts to 2%, of the assessable rent. Taxable items include roll-away beds, cribs, and energy surcharges.

Property taxes are a County of San Diego Tax. The state Property and Special Taxes Department provides guidance to San Diego as well as the other 57 counties in the state and monitors the adequacy of their tax assessment practices. California state law requires that homeowners be responsible for the timely payment of taxes on their properties. If taxes are not paid on time, penalties of up to 10% can be added onto the balance of the tax.

The State of California imposes the San Diego Tax of both income and sales. Currently, the state has a state sales tax rate of 7.2% and a local rate of 1.0%, leading to a combined rate of 8.25%. Of the collected sales tax, 6% goes to the State of California’s General Fund. Of the remaining 1.25% of the state portion, 0.25% goes toward the state’s fiscal recovery fund. This fund is used to pay of Economic Recovery Bonds. 0.50% goes toward the local public safety fund that helps support local criminal justice activities. The remaining 0.50% goes toward a local revenue fund that supports local health and social services programs. Of the 1% of the tax that goes to the local jurisdiction, 0.25% goes to the county transportation funds, while the other 0.75% goes toward county and city operations.

Additional information on taxes in the state of California can be found online at the California Tax Service Center (http://www.taxes.ca.gov/index.shtml).

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