Retailers will soon find a bit of an adjustment at the cash register when California’s 1 percent sales tax surcharge expires on July 1st. The expiration of the sales tax increase will return the statewide rate to 7.25%. The adjustment becomes effective Friday, with the expiration of the tax hikes authorized by the Legislature and signed into law by Gov. Schwarzenegger  in February 2009 as part of a $130 billion dollar budget package, raising the state sales tax rate from 7.25% to 8.25%.

Gov. Jerry Brown and Democratic lawmakers had hoped to extend the higher sales taxes past Friday, the beginning of the state’s new fiscal year, but they were unable to secure the Republican votes needed for a two-thirds super majority in order to make that happen.  As a result the higher tax rates will expire.

The State Board of Equalization, estimates that California families will save $233 million annually with tax rate reduction. Retailers and other businesses were notified in May of the change.

Because of transit and other local taxes, your local tax rate may not be falling to 7.25%.  You can find the rate for your locality by clicking here to visit the BOE website and see the current rates.