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Calif. sales tax rate to increase by a quarter-cent

Public school students are seen holding up signs in support of Prop. 30 in this undated file photo.

January 1, 2013 12:00:00 AM PST
California residents will pay an extra quarter-cent sales tax in the New Year. The tax increase stems from the passage of Proposition 30 and is set to last over the next four years.

Income taxes are also set to increase on upper-income taxpayers earning more than $250,000 for the next seven years.

The hike in California's sales tax is expected to generate an extra $6 billion a year. The money is set to fund public education.