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CA May Institute Tax Hikes on Take-Out Food and Personal Services

Would Tax Hikes Cause You to Change Your Spending Habits?


The minimum sales tax in California is 7.25 percent, but it varies by county — here in San Francisco it's 8.5 percent while Los Angeles has a sales tax of 8.25 percent. Last week Governor Arnold Schwarzenegger announced that his administration is considering "tax hikes on personal services, some prepared foods and other items" in an effort to close the budget gap.

The personal services include things like personal training and attorney's fees, and the prepared foods could include items that economists deem unnecessary like mochaccinos and artisan goat cheese pizzas. Currently, CA taxes food consumed at a restaurant and not food taken out with the intention of being eaten at home. The "other items" could include already pricey movie tickets.

Would tax hikes on these items make you think twice before using these services or buying food and beverages to-go? Even if you're not a CA resident, share your two cents!

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