Ontario, California tax rates run across several layers: an 8.75% combined sales tax, property tax starting at 1% of assessed value under Proposition 13, California state income tax that climbs to 13.3% at the top, federal income tax reaching 37%, and local levies including a 12% transient occupancy tax and a business license tax tied to gross receipts. Here is what each one actually costs in 2026, and when you owe it.
Sales and Use Tax
The combined sales and use tax rate in Ontario is 8.75% as of January 1, 2026.1California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates California’s statewide minimum is 7.25%. Ontario adds another 1.50% through voter-approved district taxes, most of it from Measure Q, passed by city residents in 2022, which added a full percentage point to fund police, fire protection, and road maintenance.2City of Ontario, California. Measure Q
Use tax is the same 8.75% rate, and you owe it on items bought from out-of-state sellers who don’t collect California sales tax: online purchases, goods shipped from other states, things bought while traveling. Report it on your California income tax return or directly to the California Department of Tax and Fee Administration. Ignoring it can bring a 10% penalty on the unpaid amount plus interest, currently 10% annually on deficiency balances.3California Department of Tax and Fee Administration. Interest Rates
Downloaded software and digital goods treated as tangible personal property are generally taxable in California. Rules for cloud subscriptions and streaming services remain unsettled, so check whether the vendor is already charging California tax before assuming the purchase is covered.
Property Tax
Ontario real estate falls under the San Bernardino County Assessor and Tax Collector. Proposition 13 caps the base rate at 1% of assessed value and limits annual assessment increases to 2% until the property changes hands or undergoes new construction, at which point it’s reassessed to current market value.4California State Board of Equalization. California Property Tax An Overview A home assessed at $500,000 carries a $5,000 base levy before any add-ons.
Most Ontario property owners pay more than the base 1%. Voter-approved bonds for schools, roads, and other infrastructure typically add 0.1% to 0.5% to the effective rate. Newer developments often carry Mello-Roos assessments, special district charges that fund streets, sewers, parks, and schools within a community.5Southern California Association of Governments. Mello-Roos Community Facilities District Mello-Roos appears as a separate line on the annual bill and stays attached to the property until the underlying bonds are paid off, which can run 20 to 40 years.
Proposition 19, effective 2021, lets homeowners 55 or older, those with severe disabilities, and natural disaster victims transfer their existing property tax base to a replacement home anywhere in California, up to three times. If the replacement costs more than the original, only the excess value gets reassessed.6California State Board of Equalization. Proposition 19
California State Income Tax
California uses nine brackets administered by the Franchise Tax Board. For the 2025 tax year, filed in 2026, single filer rates start at 1% on the first $11,079 of taxable income and run through 2%, 4%, 6%, 8%, 9.3%, 10.3%, and 11.3%, reaching 12.3% on taxable income above $742,953.7Franchise Tax Board. 2025 California Tax Rate Schedules Married couples filing jointly reach 12.3% at roughly $1,485,906.
The Mental Health Services Act (Proposition 63) adds a 1% surcharge on taxable income above $1 million regardless of filing status, bringing the effective top rate to 13.3%. California taxes residents on all income from every source: wages earned in other states, investment gains, rental income, and retirement distributions. Remote work for an out-of-state employer is still taxed here if you live in Ontario.
Federal Income Tax for 2026
For tax year 2026, federal brackets for single filers start at 10% on income up to $12,400 and reach 37% on income above $640,600. Married couples filing jointly hit 37% at $768,700.8Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The full 2026 schedule:
- 10%: up to $12,400 single / $24,800 joint
- 12%: $12,401 to $50,400 single / $24,801 to $100,800 joint
- 22%: $50,401 to $105,700 single / $100,801 to $211,400 joint
- 24%: $105,701 to $201,775 single / $211,401 to $403,550 joint
- 32%: $201,776 to $256,225 single / $403,551 to $512,450 joint
- 35%: $256,226 to $640,600 single / $512,451 to $768,700 joint
- 37%: above $640,600 single / above $768,700 joint
The 2026 standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.8Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Ontario itemizers hit the state and local tax (SALT) deduction cap, which for 2026 is $40,400 ($20,200 for married filing separately). A homeowner paying $8,000 in property tax and $15,000 in state income tax has $23,000 in deductible SALT, within the cap. A dual-income household with $50,000 in combined state income and property taxes loses the deduction above $40,400.
Local Taxes for Ontario Businesses and Short-Term Rental Hosts
Every business operating inside Ontario city limits needs a business license before opening. Service-based businesses pay an annual flat fee of $50 plus $0.40 per $1,000 of gross receipts under the Ontario Municipal Code.9American Legal Publishing. Ontario Municipal Code – Sec. 3-1.202 Services Business License Tax A service business with $500,000 in annual gross receipts owes $250. Retail, wholesale, professional services, and manufacturing each have their own rate schedules in the municipal code, so a restaurant and a logistics company calculate the fee differently.
Hotels, motels, and short-term rentals charge a 12% transient occupancy tax on rent for stays of 30 consecutive days or less.10American Legal Publishing. Ontario Municipal Code – Chapter 6 Transient Occupancy Taxes Operators collect it from guests at payment and remit it to the city. Hosts renting on platforms like Airbnb within city limits qualify as operators and must register, collect, and remit. On a $200 nightly rate, the guest pays an additional $24.
California does not impose its own estate or inheritance tax, so no additional state-level estate tax applies at death.
Filing Deadlines and Late Penalties
Federal returns for the 2025 tax year are due April 15, 2026.11Internal Revenue Service. IRS Announces First Day of 2026 Filing Season California returns follow the same date. An extension gives you until October 15 to file, but it doesn’t extend the deadline to pay. Any balance owed is still due April 15, with interest and penalties running from that date.
The federal failure-to-file penalty is 5% of the unpaid tax per month, capped at 25%.12Internal Revenue Service. Failure to File Penalty If a return is more than 60 days late, the minimum penalty is the lesser of $525 or 100% of the unpaid tax. A separate failure-to-pay penalty runs at 0.5% per month. The two penalties stack. California adds its own late-filing penalties on top. Unclaimed refunds expire after three years, so a late filer with a refund coming can lose it entirely.