Los Angeles County raises sales tax to 10.25% to fund health services
Los Angeles County implemented a 10.25% sales tax on Thursday, Oct. 1, 2026, raising the rate by half a percent under the Essential Services Restoration Act approved by voters in June.
The increase, which moves the county’s rate from 9.75% to 10.25%, is expected to generate roughly $1 billion annually and about $5 billion before the measure’s sunset in 2031. County officials say the new revenue will bolster health‑care services that have been hit by recent cuts to federal Medi‑Cal funding.
Under the measure, 45% of the additional revenue will be funneled through nonprofits and outpatient clinics to assist under‑insured and low‑income residents, while 22% is allocated to LA Health Services, the county’s public health system. The remaining funds flow into the county’s general fund, where they are subject to annual audits, public reporting, and oversight by a nine‑member Citizens’ Oversight Committee that includes the Department of Public Health director.
Groceries, prescription medications and most medical equipment are exempt from the higher rate, a detail highlighted in multiple reports. The county’s auditors and the oversight committee will track spending and publish results, aiming to provide transparency for taxpayers who voiced concerns about accountability.
Critics argue the tax adds to an already steep cost of living. Supervisor Kathryn Barger warned that residents are “stretched thin” and that the county already has one of the nation’s highest sales‑tax burdens. The Libertarian Party of Los Angeles County has filed a lawsuit challenging the tax’s legality, raising the possibility of refunds if a court overturns the measure.
With the new rate, many cities within the county—such as West Hollywood, Santa Monica and Pasadena—will see combined sales‑tax totals exceeding 11%. The hike makes Los Angeles County one of the highest‑tax jurisdictions in the United States, rivaling places like Cook County, Illinois. Business owners and shoppers alike have expressed concern that the added half‑cent could deter spending and impact already strained small‑business margins.
The next step for the measure is a series of quarterly reports from the oversight committee, followed by a scheduled audit at the end of the fiscal year. County officials say they will use the findings to adjust allocations and ensure the projected $1 billion in annual revenue supports the health‑care services that prompted the vote.
