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CA – Rate increase affects contracts prior to sales tax increase.

Posted by salestax on April 24, 2009

Usually when states have rate increases, they make concessions for those who entered into binding agreements before the effective date of the rate increase.  California, however, is not taking this route. 

So, if you had a binding agreement to be charged 8.25% in sales tax, that agreement is no longer valid as quoted, the bills associated with the agreement will be calculated at 9.25%.  Oh, but if a certain district or city/county would raise it’s rate, then you can abide by the terms of the original agreement.  So when Los Angeles or any of the other locals in CA start raising rates, this rule doesn’t apply to those smaller tax rates. 

Way to go CA!  Brilliant!

To see the special notice CA put out about this, click here.

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