When comparing California vs. Florida for taxes, the absence of a state income tax in Florida often draws attention. However, this doesn’t mean Florida offers a lighter tax burden across the board. Many low- and middle-income families pay similar or even higher overall tax rates in Florida than in California. This is in large part due to the Sunshine State’s heavier reliance on sales and property taxes. So while high earners face steeper income taxes in California, the overall tax environment isn’t inherently less favorable for most residents.
A financial advisor can help you with your own tax planning to help protect you as you grow your wealth.
Taxes in California
California’s tax structure includes progressive income taxes, variable local sales tax rates and capped property taxes under Proposition 13. The overall system raises substantial revenue while keeping tax burdens relatively modest for low- and middle-income households compared to other states.
Income Tax in California
California employs a progressive income tax system with nine brackets, plus a surcharge for single filers making over $1 million ($2 million for joint filers). Below are the tax rates and corresponding income brackets for both single filers and married couples filing jointly:
2025 Income Tax Brackets and Rates in California
| Taxable Income Bracket (Single Filers) | Tax Rate | Taxable Income Bracket (Married Filing Jointly) | Tax Rate |
|---|---|---|---|
| $0 – $10,756 | 1% | $0 – $21,512 | 1% |
| $10,756 – $25,499 | 2% | $21,513 – $50,998 | 2% |
| $25,499 – $40,245 | 4% | $50,999 – $80,490 | 4% |
| $40,245 – $55,866 | 6% | $80,491 – $111,732 | 6% |
| $55,866 – $70,606 | 8% | $111,733 – $141,212 | 8% |
| $70,606 – $360,659 | 9.3% | $141,213 – $721,318 | 9.3% |
| $360,659 – $432,787 | 10.3% | $721,319 – $865,574 | 10.3% |
| $432,787 – $721,314 | 11.3% | $865,575 – $1,442,629 | 11.3% |
| Over $721,314 | 12.3% | Over $1,442,629 | 12.3% |
Additionally, individuals with taxable income exceeding $1 million are subject to the Mental Health Services Tax. This tacks on an extra 1% surcharge, effectively making the top rate 13.3%.
Sales Tax in California
The statewide base sales tax rate is 7.25%, comprising a 6% state tax and a mandatory 1.25% local tax. Local jurisdictions may impose additional district taxes, leading to combined rates that can reach up to 10.5% in certain areas. For instance, cities like Oakland have a rate of 10.25%, while San Francisco stands at 8.625%.
Property Taxes in California
Regarding property taxes, California’s Proposition 13 limits the general property tax rate to 1% of a property’s assessed value, with annual assessment increases capped at 2%. As a result, the average effective property tax rate is approximately 0.71%, lower than the national average of 0.90%. For example, in Riverside County, the median home value is $462,900, resulting in an average annual property tax payment of about $3,959.
Taxes in Florida
Florida’s tax system is structured around consumption and property taxes rather than income. The state does not collect personal income tax, which often appeals to retirees and high earners. However, other taxes—particularly on sales and property—play a larger role in funding state and local services.
Florida is one of nine states that do not levy a personal income tax. Residents do not pay tax on wages, investment income or retirement distributions at the state level. This can result in lower tax liabilities for high earners. On the flipside, it also means the state relies more heavily on other forms of taxation.
Sales Tax in Florida
Florida has a statewide base sales tax rate of 6%. In addition, counties can impose a local surtax of up to 2.5%. This can result in combined rates ranging from 6% to 8.5%, depending on location. For example, Miami-Dade County has a combined rate of 7%.
Florida’s sales tax base is broader than that of many states, covering more services, including some that are exempt in California, such for car repairs and commercial cleaning services.
Property Taxes in Florida
Property taxes in Florida are administered at the county level and based on assessed property value. The average effective property tax rate is approximately 0.82%, slightly below the national average. However, property tax bills vary widely depending on local millage rates and home values.
For instance, in Broward County, with a median home value of $348,600, the average annual property tax bill is about $3,305, or 0.95%. Florida offers exemptions, providing some relief to homeowners. For example, the Homestead Exemption can reduce the taxable value of a primary residence by up to $50,000.
California vs. Florida for Taxes
California’s reputation as a high-tax state does not hold true for most low- and middle-income families. According to the Institute on Taxation and Economic Policy, Californians in the bottom 80% of the income scale pay state and local taxes at rates close to the national average, and those in the bottom 40% pay less than similarly situated families in Texas or Florida.
For wealthy Californians, tax rates are higher than in most other states, but not drastically so when compared to the tax burdens lower-income residents face elsewhere. In fact, 16 states, including Texas and Florida, tax their poorest residents at rates higher than California’s top 1% pay.
California’s system is less regressive than others because it relies more heavily on income taxes from the wealthy while offering refundable credits, such as the Earned Income Tax Credit and Child Tax Credit, to lower earners. This contributes to relatively strong overall revenue collections without placing heavier burdens on typical households. By contrast, states like Texas and Florida rely more on consumption taxes, which fall more heavily on low-income families and tax more services. They also raise more sales tax from business purchases, a cost often passed on to consumers.
For households earning under $138,000, sales and property taxes make up the bulk of state and local tax payments. For wealthier households, income taxes dominate. In Texas and Florida, families earning under $22,000 often pay a greater share of their income in taxes than Californians earning over $860,000.
While tax structures differ significantly between states, California’s system results in comparatively modest tax rates for most families and a broader contribution from the wealthy, helping fund state services without requiring high tax rates on the majority of residents.
Bottom Line
State tax systems reflect trade-offs between revenue sources and who bears the cost. California leans more on higher earners through income taxes. Meanwhile, Florida spreads the burden more evenly through sales and property taxes. The effect on households depends largely on income level, spending patterns and local tax rates—not just headline policies.
Tips for Tax Planning
- Consider working with a financial advisor to plan for your tax liability. They can help you prepare for situations that might hit your tax bill next year and protect your assets. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Estimate your next tax bill with a federal income tax calculator so you can start to plan ahead for next year.
Photo credit: ©iStock.com/Tom Merton, ©iStock.com/yacobchuk, ©iStock.com/pixdeluxe
Read the full article here
