Taxes in Los Angeles come from three levels at once: the IRS, the State of California, and the City and County of Los Angeles. Between them, you’re looking at federal and state income tax, payroll taxes, a 9.75% sales tax, property tax capped by Proposition 13, and a handful of city-specific taxes on real estate sales, business receipts, hotel stays, utilities, and parking. Each has its own rate and its own deadline, and missing a deadline is where most of the avoidable money goes.
Federal Income Tax
If you earn above the filing threshold, you owe federal income tax on a progressive schedule. For the 2026 tax year, single filers pay 10% on the first $12,400 of taxable income and climb through the brackets to 37% on income above $640,600. Married couples filing jointly start at 10% on the first $24,800 and don’t reach 37% until income exceeds $768,700.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Only the dollars above each threshold are taxed at the higher rate, so moving up a bracket doesn’t reprice your entire income.
The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 If you itemize, your California income tax, property tax, and other local taxes are deductible, though the combined state and local tax deduction is capped at $40,000 for most filers under current law.
California State Income Tax
California layers its own progressive income tax on top of the federal one, with rates starting at 1% and climbing through nine brackets to 12.3%. Income above $1 million carries an additional 1% surcharge originally passed as Proposition 63 to fund mental health programs, which brings the top effective rate to 13.3%. The tax applies to wages, business income, capital gains, rental income, and most other earnings.2Franchise Tax Board. Personal Filing Information
California’s standard deduction is much smaller than the federal one. For 2025 it was $5,706 for single filers and $11,412 for joint filers, with slight inflation adjustments expected for 2026.3Franchise Tax Board. Deductions California also taxes capital gains as ordinary income rather than at a preferential rate, which catches some investors off guard. State returns are due April 15, the same day as your federal return.
Payroll Taxes
Employees see several taxes come out of the paycheck before the money reaches them. Social Security takes 6.2% of wages up to $184,500 in 2026, matched by the employer.4Social Security Administration. Contribution and Benefit Base Medicare adds 1.45% with no income cap, plus an extra 0.9% surcharge on wages above $200,000.
California adds State Disability Insurance, which funds short-term disability benefits and paid family leave. The 2026 SDI rate is 1.3% of gross wages with no upper limit, so someone earning $200,000 pays $2,600 in SDI alone.5EDD – CA.gov. 2026 Federal and State Payroll Taxes Self-employed workers don’t pay SDI automatically but can opt in.
Sales and Use Tax
The combined sales tax rate in the City of Los Angeles is 9.75%, stacking state, county, and local district taxes.6California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates You pay it on most physical goods. Unprepared groceries, prescription medications, and most services are exempt. The rate varies slightly by location within LA County because individual cities and special districts add small taxes of their own, so a receipt from Santa Monica may differ by a fraction of a percent from one in Pasadena.
Use tax is the piece most people overlook. If you buy something online or out of state and the seller doesn’t collect California sales tax, you owe the equivalent amount as use tax. It’s due by April 15 of the following year and can be reported on your California income tax return.7California Department of Tax and Fee Administration. California Use Tax for Personal Use
Property Tax
Proposition 13, a 1978 amendment to the California Constitution, caps the base property tax rate at 1% of assessed value and limits annual assessment increases to 2%.8Assessor: Assessor. Proposition 13 Assessed value resets to current market value when the property changes hands or undergoes new construction, which usually means a steep tax jump for the buyer compared to what the previous owner paid.
Voter-approved bonds and special assessments for schools, water districts, and other local needs get added to the base 1%. Most LA County homeowners end up paying an effective rate between roughly 1.2% and 1.3% of assessed value once those extras are included.8Assessor: Assessor. Proposition 13
Homeowners’ Exemption and Supplemental Bills
Owner-occupants can claim a homeowners’ exemption that reduces assessed value by $7,000, worth about $70 a year at the 1% base rate.9California State Board of Equalization. Homeowners’ Exemption First-time claimants need to file by February 15 to receive the full exemption for that year.
Buying a property also triggers a supplemental tax bill. The county reassesses to current market value and sends a prorated bill covering the difference between the old and new assessment for the remainder of the fiscal year, which runs July 1 through June 30. You may receive one or two supplemental bills on top of your regular annual bill in the months after your purchase.10California State Board of Equalization. Supplemental Assessment
Payment Deadlines and Penalties
Property taxes are paid in two installments. The first is due November 1 and becomes delinquent after December 10. The second is due February 1 and becomes delinquent after April 10.11Taxes: Property Tax Function Important Dates. Property Tax Function Important Dates Miss either date and a 10% penalty is added to the unpaid installment. The county doesn’t send a separate reminder before the penalty attaches.
Real Estate Transfer Taxes
Selling property in the City of Los Angeles triggers stacked transfer taxes. Los Angeles County charges a documentary transfer tax of $1.10 per $1,000 of the sale price on all property transfers.12Los Angeles County RR/CC – Registrar-Recorder/County Clerk. General Info The city adds another $4.50 per $1,000, for a combined base rate of $5.60 per $1,000 (about 0.56%) on sales below the Measure ULA thresholds.
Measure ULA, passed by voters in 2022 and often called the “mansion tax,” imposes an additional transfer tax on high-value sales inside city limits. Sales above $5,300,000 but below $10,600,000 are taxed at an added 4%, and sales at $10,600,000 or above at an added 5.5%.13Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ Thresholds adjust annually for inflation. On a $6 million sale, the Measure ULA tax alone would be $240,000 before the base county and city transfer taxes are added. The tax falls on the seller by default, though buyer and seller can negotiate who bears the cost.
Local Business Taxes
Anyone operating a business inside the City of Los Angeles needs a Business Tax Registration Certificate from the Office of Finance.14Los Angeles Office of Finance. How to Register for a BTRC The BTRC is an annual tax on gross receipts, with rates that depend on your business category. Retail, professional services, and construction are taxed at different rates per dollar of receipts.
Businesses with gross receipts under $100,000 worldwide qualify for a small business exemption and owe no tax, provided they file the annual renewal on time.15Los Angeles Office of Finance. Small Business Exemption FAQ Business taxes are due January 1 and become delinquent if unpaid by the end of February. Penalties start at 5% in early March, then climb to 10% by April, 15% by May, 20% by June, and 40% by July.16Los Angeles Office of Finance. Business Tax Renewal Instructions A late renewal can also cost you the small business exemption for that year.
Other Local Taxes
Several targeted city taxes hit residents, visitors, and property owners in ordinary transactions.
Transient Occupancy Tax
Hotels, short-term rentals, and other lodging within the City of Los Angeles carry a 14% transient occupancy tax on stays of 30 days or less.17Los Angeles Office of Finance. Transient Occupancy Tax Requirements It applies equally to Airbnb listings, vacation rentals, and traditional hotels. Owners renting short-term must register with the Office of Finance, collect the tax from guests, and remit it. In unincorporated areas of LA County, the rate is 12%.18Treasurer and Tax Collector. Transient Occupancy Tax
Utility User Tax
The city taxes utility consumption directly. Electricity and natural gas bills carry a 10% tax, and telephone and communications services are taxed at 9%. The charges appear as line items on your utility bill and flow to the city’s general fund. Unincorporated LA County charges 4.5%.
Parking Occupancy Tax
The city adds a 10% tax on parking fees at any commercial lot, garage, or valet operation within city limits.19Los Angeles Office of Finance. Parking Occupancy Tax and Auto Park The facility collects the tax and remits it. Free validated parking isn’t taxed, but any lot charging a fee is.