| California State raises its revenue by imposing various | | | | . The state lottery was established under the |
| taxes such as estate tax, insurance tax, alcoholic | | | | Proposition 37, in November 1984. The California State |
| beverage tax, gambling, motor vehicle tax and tobacco | | | | Lottery Act sets the distribution of the lottery |
| tax. In addition, the employees or the employers have | | | | proceeds. Lottery revenue also funds a minor source |
| to pay taxes to trust funds, to help disabled and | | | | for schools. |
| unemployed employees. | | | | . Horse racing and the license fees are basically levied |
| Estate tax-This tax is the fifth largest source of the | | | | on the amounts that are raised during horse racing |
| General Fund Tax and it was estimated as $937 | | | | meets. This tax ranges from 0.4 to 2 percent and it |
| million in 1999-00.In June 1982, this tax was established | | | | depends on the type of wages, type of racing and |
| under Proposition 6. This eliminated the inheritance and | | | | also the placement of the wager. An estimated |
| the Gift tax law of the state. Estate tax is levied on | | | | $35million was generated from these levies in 1999-00. |
| the adjusted property value of an individual taxpayer, | | | | Motor tax- Motor tax is the main source of state |
| after his demise because the federal law permits a | | | | special fund revenue, estimated to be around $8.4 |
| credit against the federal estate tax paid and the state | | | | billion of the special fund total. |
| rate is equal to the maximum federal credit allowed. | | | | Accounting to the largest share of motor taxes, the |
| Insurance tax-This tax was implemented in 1911. This is | | | | state fuel tax is mainly categorized into three types: |
| the oldest tax in California. Insurance tax is charged on | | | | 1. License Tax or Gas Tax-This tax is imposed on the |
| the premium sold by insurance companies and is | | | | fuel distributors, based on per gallon of fuel that is |
| charged on all the states insurance companies except | | | | distributed. This tax levied contributes to the greatest |
| on the license fees and the real estate taxes. This is | | | | share of fuel related tax revenue. |
| the fourth largest source of General Fund revenue and | | | | 2. Used Fuel Tax- This is an excise tax which is levied |
| it was raised by $1.3 billion in 1900-00, from 2000 | | | | on the used fuel. This is mainly imposed on alternative |
| companies. | | | | fuels such as compressed natural gas, ethanol and |
| Alcoholic Beverage Tax-Excise taxes are levied on | | | | liquefied petroleum. |
| the beverages sold by the manufacturers, on a per | | | | 3. Diesel Fuel Tax-This tax is levied on the delivery and |
| gallon basis. This tax is levied in addition to the federal | | | | sale of diesel fuel and the record is generally collected |
| excise tax. In addition to these two taxes, the retail | | | | from the distributors. |
| establishment liquor owner pays an annual license fee. | | | | Tobacco tax-This tax is levied on cigarette distributors. |
| The tax rate differs, based on the type of beverage. | | | | The California State tobacco tax is currently $0.87 per |
| The fund raised from this tax was estimated to be | | | | pack. |
| $274 million in 1999-00. Majority of this revenue is | | | | Tax related to Employment-The disability insurance |
| obtained from distilled beer and spirits. | | | | program is funded by the State Disability insurance |
| Tax on Gambling related Activities-California State | | | | company and it is levied on the employees and it is |
| permits a state lottery, horse racing and bingo for | | | | deducted from their payroll. |
| charitable purposes. | | | | |