Data Tracker

Who pays the most and the least income tax in California?

Watch the California Franchise Tax Board count your money

Hundreds of workers at the California Franchise Tax Board continue to process about 1.4 million income tax returns filed on paper. April is by far the largest volume month for tax returns at the Butterfield Way FTB office.
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Hundreds of workers at the California Franchise Tax Board continue to process about 1.4 million income tax returns filed on paper. April is by far the largest volume month for tax returns at the Butterfield Way FTB office.

Tax deadline day is Tuesday (yes, April 18) and the following weeks and months again will make clear that, when it comes income taxes, certain parts of California generate an outsized amount of revenue.

Taxpayers in Los Angeles, Santa Clara, Orange, San Diego and San Francisco counties had the highest total federal tax liability – the amount of taxes owed – in 2014, the most recent data available, according to Internal Revenue Service statistics. In terms of average liability per return, seven Northern California counties – Marin, San Mateo, San Francisco, Santa Clara, Contra Costa, Napa and Alameda – lead the state.

The tax filing deadline normally is April 15. This year’s deadline is Tuesday, April 18, because the 15th falls on a Saturday and Washington, D.C., will observe Monday, April 17, as Emancipation Day, a legal holiday. Under federal tax law, legal holidays in District of Columbia affect filing deadlines across the nation.

Palo Alto’s 94301 ZIP code, meanwhile, had the highest state adjusted gross income in the 2015 tax year – more than $10 billion – and total state tax liability of almost $1.2 billion, according to Franchise Tax Board statistics. In the Sacramento region, Folsom’s 95630 had the highest adjusted gross income, $3.1 billion, and total state tax liability of almost $158 million.

At the other end of the scale, remote counties in the foothills and Sierra had the lowest total tax liability, with Yuba, Imperial and Trinity counties having the lowest average tax liability per return. And ZIP codes in Mecca (Riverside County), Huron (Fresno County) and Lamont (Kern) were among about two-dozen ZIP codes with average tax liability of $200 or less.

Next week’s filings also should help answer the question of whether the economy, after more than 90 straight months of post-recession expansion, continues to grow or if there are signs of trouble ahead.

“The downturn is inevitable,” Brown said in January, when he released his latest budget proposal. Others, though, including the nonpartisan Legislative Analyst’s Office, have suggested the administration’s revenue outlook as overly pessimistic.

Indeed, the analyst’s office believes there’s a strong chance that the state’s tax receipts will put it on track to exceed a voter-approved spending limit for the first time in 30 years, raising the possibility of tax rebates or other measures.

Whoever is right, California’s government will stay heavily reliant on the state income tax to function. It represented more than two-thirds of state general fund revenue in the fiscal year ending June 30, 2016, with almost 17 percent of that money arriving in April, according to the State Controller’s Office.

In his January spending plan, Brown predicted the state to take in $13.5 billion in April; through Wednesday, the state had received about $2.5 billion this month.

$85 billion Estimated California personal income tax revenue in 2016-17.

$45.7 billion California personal income tax revenue in 2009-10 (about $51.5 billion in today’s dollars)

California also remains a major source of income tax revenue for the federal government, with $205 billion in total tax liability in 2014, up from $128 billion in the 2009 tax year.

Want to follow along with the 2016 state returns? Starting Monday, the analyst’s office will post daily income tax collection updates and the California State Controller’s Office also has a daily tracker.

Data Tracker is a regular feature that breaks down the numbers behind today’s news. Explore more trends at sacbee.com/datatracker.

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