tax assessed by the state and local governments of California is one of the highest in the nation and varies by city and county from a low of 7.25% to 10.0%. Food, prescription drugs and services are exempt from sales tax — about one-third of all purchases have sales tax applied to them. Sales taxes are collected by the state, which re-allocates them to the various counties, cities, districts, etc. The basic statewide sales and use tax rate is 7.25% and is divided as follows: 6.50% State, 0.75% plus a 0.25% local transportation fund to city or county of place of sale (distributed quarterly). All taxes above 7.25% are so called "district taxes" which are imposed locally, after an area wide vote, under the Transactions and Use Tax Law. Local, voter approved, sales tax rate increases have resulted in higher sales tax rates in various California locations. Sales taxes imposed for general governmental purposes are subject to simple majority approval. Sales taxes imposed for specific purposes like transportation are subject to two-thirds voter approval. Used cars have a 7.25% to 10.0% sales tax applied to the used car purchase price. This sales tax is applied to all new and used car, planes, and boats purchased even if they are purchased out of state. In addition to having a clear title, a passed smog and emission inspection on the vehicle plus proof of insurance are needed before a car can be registered. New residents to California are required to register their vehicles within 20 days of establishing residency. A department of motor vehicle (DMV) employee will perform a physical inspection of the vehicle and verify the vehicle identification number (VIN) before one receives a California registration certificate, license plates and correct yearly registration stickers for the vehicle. State and local government vehicles are exempt from paying fees and are issued "exempt" license plates. California vehicle license fees are 0.65% of depreciated vehicle's value. These fees are applied annually. Licenses are renewed in the month the vehicle was originally registered and have a yearly sticker applied to them after paying the registration fee to show fee payment. The 8.84% state corporate income flat tax rate is the highest in the west and one of the highest in the nation. Banks and financials have a 10.84% flat tax applied to their profits. THe S corporation rate is 1.5% while S corporation bank and