California lawmakers pass bill allowing higher local sales taxes

By the Editorial Team · Wednesday, July 8, 2026

California lawmakers have passed Senate Bill 762, allowing certain counties and cities to seek sales tax increases beyond the state's 2% cap, pending final Senate approval and the governor's signature. The bill’s passage, secured by key Republican support despite party opposition, could enable local governments to boost revenues but raises concerns about increasing the financial burden on residents amid high living costs.

California lawmakers have approved a bill that would allow certain counties and cities to seek sales tax increases exceeding the state’s current 2% cap. The legislation, Senate Bill 762, now awaits a final procedural vote in the state Senate before being sent to Governor Gavin Newsom for approval.

The measure addresses requests from approximately a dozen local jurisdictions aiming to raise sales tax rates beyond established limits. Under existing state law, local governments must obtain legislative approval to impose sales tax increases above the 2% threshold.

While state Republicans have generally opposed proposals to raise taxes, Senate Bill 762 passed with notable support from two Republican Assembly members—Heath Flora of Ripon and Juan Alanis of Modesto—who serve as leaders of the Assembly GOP caucus. Their votes were pivotal, as the bill secured exactly the two-thirds majority required for passage.

Other Republicans either voted against the bill or abstained, and Flora’s backing has prompted criticism from some within his party. A source familiar with legislative dynamics described internal frustrations and discontent among GOP members and donors. Flora, who recorded the lowest primary voter support among incumbent legislators in June, is seen by some as out of step with his caucus on this issue.

David Kline of the California Taxpayers Association reiterated the organization’s consistent opposition to tax increases, emphasizing concerns about rising living costs in California. “We have been consistently opposed to the many bills introduced to increase local taxes. We are hopeful that legislators will start opposing these bills because they are dramatically increasing the cost of living in California,” Kline said.

If enacted, the bill would grant legislative permission for select local governments to impose sales tax rates above the current statutory cap, potentially allowing them greater revenue flexibility. Advocates argue this could support local funding needs, while critics warn of the financial strain on consumers amid already high costs in the state.

Following the Senate’s final procedural vote, the bill will advance to Governor Newsom, who will decide whether to sign it into law.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.