Californians are being nickel-and-dimed statewide — with small taxes and fees sprouting everywhere —piling up into a costly mess.
An analysis by The California Post showed surcharges of all sizes tucked away in purchases of everything from clothing to alcohol and hotel stays.
For example, while a night at a hotel in Los Angeles might advertise at a cost $239, that’s just the base rate. Tack on another $50 to the bill for a more accurate representation of the final bill, all thanks to a pesky tax.
Every night spent at a hotel or Airbnb incurs a 14% Transient Occupancy Tax, or “Room Tax,” which goes toward LA’s general fund.
In 2022, then-Mayor Eric Garcetti signed into law the Hotel Worker Protection Ordinance, which requires hotels to provide workers with a “personal security device,” like a panic button, to protect them from violent or threatening guests — that resulted in hotels adding a surcharge around $10.
Then there’s the California Tourism Assessment and the LA Ordinance Tourism Tax, both collect money to fund marketing and advertising promotion for the state and city.
“It’s literally just a sales campaign, not cleaning up the streets, not improving the the life experience with people there, but marketing,” Alexander Efros, a certified financial planner and tax specialist, told The Post. “That’s what it’s going to.”
Add on the LA Ordinance Occupation Tax, which is a fee business have to pay to operate, and that original bill of $239 quickly balloons into $289 for a one night stay.
Thirsty? That bottle of wine also has a hidden fee.
The California Redemption Value (CRV) tacks on 10 cents for each bottle over 24 ounces — although it’s technically not a tax, as it can be refunded if the container is returned or recycled.
If it’s less than 24 ounces, the fee drops to 5 cents per bottle.
At 8.99%, California has the 7th highest combined state and average local sales tax, according to the Tax Foundation. In Los Angeles, expect to pay close to an additional $10 for every $100 spent.
Miles Stapp, who is from Sonoma County, said people have become desensitized to the high taxes.
“There’s sort of a blind acceptance to the reality of our world right now that I can’t quite shake, anger feels a little fruitless — wish we were leaving in a different reality,” Stapp told The Post while out shopping in LA Wednesday.
California did pass Senate Bill 478, which was later amended by SB 1548, that requires businesses to disclose all mandatory charges — in other words the price listed is the price you pay, but it doesn’t change all the taxes that still rack up on the bottom of the receipt.
On the business side, the taxes are even more complex.
“If you like taxes, then California is the place for you,” Efros said. “I sometimes say that New York and California are in a competition to see which one is more vicious in terms of tax collection.”
Efros told The Post that from a business standpoint, California is very “unfriendly.”
“For the privilege of having an LLC here in the state, there’s an $800 minimum tax [per year] that goes along with that,” Efros said. “So whereas in other states, you’ll have an owner of real estate properties, ten different properties, ten different LLCs, no problem. In California, now they’re paying $8,000 a year, just for the privilege of having that set up.”
Efros also highlight the Mental Health Services Act, which imposes a 1% tax on personal income exceeding $1 million.
“We’ve seen that amount easily reach the five figures, that people aren’t expecting to pay,” Efros told The Post. “A lot of times people ask, what is that? I’ve never heard of it. Well, it’s definitely there and that increases the sticker shock on the California side.”
While California’s excessive taxes are not new, Efros, who started Efros Financial in 2018, said more and more of his clients clients are opting to leave the state because the amenities are no longer compensating for the high-cost of living.
“They’re seeing that the cost versus benefit has shifted in the past few years. There were no really new taxes, new numbers that that really came to light — it’s just dealing with the traffic, dealing with what the streets look like, dealing with the fact that half the state’s on fire,” Efros told The Post.
While Californians face a slew of taxes and high costs in everyday living, it soon could get worse.
Voters will decide in June whether to pass a half-cent sales tax hike backed by Los Angeles County Board of Supervisors, which would increase the costs of shopping, dining out and other everyday purchases across the county.
The Los Angeles City Council, looking to capitalize on the tourism boom during the 2028 Olympics, approved a ballot measure to slap an additional 2% on top of the 14% transient occupancy tax (hotel tax) during the games, then reducing it to 1% the following years.
This comes as voters will also consider a one-time tax of 5% on fortunes exceeding $1 billion.