The base sales tax rate in California is 7.25% and this applies to the whole state of California, but, the rate you will likely pay or have to collect may be different since there are a variety of different sales tax rates depending on the county you are in. So, the way California’s sales tax is calculated is the base rate of 7.25% California sales tax throughout the whole state plus the additional percentage rate each county or district charges, equals the total California sales tax rate you will pay as a consumer or have to collect from your customers if you are a business. The sales and use tax rate in a specific California location has three parts: the state tax rate, the local tax rate, and any district tax rate that may be in effect.
Any retail, gas station/convenience store or restaurant-related business you visit in California should charge you the prevailing rate of California’s sales tax according to the county they are located in. While paying sales tax is mostly applicable to the sale of products, it may also apply to some service-related businesses such as hotels, taxi and limo services, sale of admissions, and charges for participation in games and amusement activities. If you are unsure whether your business should collect California sales tax, you may want to visit the California Department of Tax and Fee Administration website.
Paying California’s sales tax as a consumer is a seamless process that you do not need to worry too much about when visiting a restaurant or retail store or taking your car in for a service. On the other hand, as a business owner or someone looking to start a business in California, it is a whole different matter. If you are responsible for collecting sales tax from your customers, you need to know exactly what your responsibilities are, and you need to follow the rules of California sales tax collection, making sure you pay the State of California every month for the total amount of California sales tax you collect. In some instances, this may apply to online businesses, and if you participate in the Amazon FBA program, you may be subject to sales tax collection depending on where your products are warehoused and the volume of your annual transactions.
California Sales Tax Rate
The base rate of sales tax in California is 7.25%, but the average range of California sales tax, including the county sales tax rate, is approximately 7.75%. For your convenience, we have included a table (below) that lists the California sales tax rate for each county within the state. The table combines the base rate of 7.25% and the local county/district rate to give you a total tax rate for each county.
California has a few different counties, 58 in total. The California sales tax rate for most counties is 0.5%, which means that most counties, when combined with California’s sales tax rate, charge a total of 7.75% sales tax.
What you will find in the U.S., which is different from some other countries, is that when you see the price of a product such as a t-shirt in a retail store, or food on a menu in a restaurant, it is usually plus state and county sales tax.
So, when you checkout your items in a store or request the bill at a restaurant, you will likely pay the price you saw on the label or menu + state and county sales tax. This often takes foreigners and those not used to this system by surprise because, in many other countries, the price you see is the price you pay, and the price quoted includes any sales tax or value-added tax (VAT).
California Sales Tax
To get a basic understanding of how California imposes a state sales and use tax on most products and some services purchased in the state you can make a quick calculation of the amount of California sales tax you will pay based on the product price and sales tax rate charged within the county you are purchasing from.
So, if you are paying the Los Angeles County sales tax, the rate would be 9.5%. A $300 product/purchase would cost you $328.50 in total because of the inclusion of the county and state sales tax.
State of California Sales Tax for Businesses
As a business owner selling taxable goods or services, you act as an agent of the state of California by collecting tax from purchasers and passing it along to the appropriate tax authority. As of July 1, 2017, sales and use tax in California is administered by the California Department of Tax and Fee Administration (CDTFA). Previously, it was administered by the California State Board of Equalization.
There is specific terminology surrounding whether, as a business, you need to collect California sales tax. This is called “Sales Tax Nexus.” It basically means, does your business have a “significant presence” in the state. It used to be that sales tax nexus only applied to businesses with a physical presence in the state, such as having employees, an office or warehouse, or retail store. As of June 2018, this all changed through a ruling by the Supreme Court of the United States. States are now free to tax businesses based on their economic and virtual connections to the state, or economic nexus. This has had a profound impact on out-of-state businesses that sell online as sales tax nexus can be triggered whether they have a physical presence in the state or not.
Any of the following criteria may be considered by the state of California as qualifying a seller/business to have sales tax nexus:
- A physical location – if you own or lease an office, place of distribution, sale or sample room, or warehouse/storage place.
- Someone working for you – examples of this include a representative, an agent, salesperson, canvasser, independent contractor, or a solicitor/attorney operating within California under the authority of the retailer or its subsidiary for purposes of selling, delivering, assembling, installing or taking orders for any personal property.
- An affiliate – an affiliate can be a person or persons in California, that receive a commission via directly referring potential purchasers or personal property to the retailer, whether the affiliate is via an Internet-based link or a website. In this instance, the Nexus will occur if sales from the affiliates exceed $10,000 within a 12 month period, and if total in-state sales exceed $1 million within that 12 month period too.
- Tradeshows – making sales at a tradeshow may make you eligible for sales tax nexus, however, if the retailer had a physical presence at a tradeshow for 15 or less days in a 12-month period of time and didn’t accumulate over $100,000 of gross revenue from these events in the previous calendar year, nexus will not come into effect. However, sellers will still be required to collect sales tax from customer orders at these tradeshows.
To learn exactly what the California Department of Tax and Fee Administration determines to be sales tax nexus in California, head over to their website and see what businesses this applies to and what California sales tax you are expected to collect from your customers.
Not only may your business qualify for sales/economic nexus where you have to collect and pay California sales tax, depending on what business you own, you may also have to hold a specific permit to sell these products in the first place, here are the permits you may need to do business within your specific industry in California:
- California Seller’s Permit – if you are doing business in California and are looking into selling or leasing tangible property that is subject to sales tax sold at the retail level, you must have a seller’s permit and display it at your place of business, if you need to obtain this permit, or any of the others mentioned below, head over to the California Department of Tax and Fee Administration Permits and Licenses section.
- Cannabis Tax Permit – if you are a distributor of cannabis and cannabis products, you will be required to obtain a cannabis tax permit, you will need this permit along with a regular seller’s permit.
- Cigarette and Tobacco Products – if your business sells cigarettes, cigars, and other tobacco or tobacco-related products, you are required to have a California Cigarette and Tobacco Products Retailer’s License before purchasing or selling cigarettes and other tobacco products. Again, you must obtain this license in addition to your seller’s permit.
- Covered Electronic Waste Recycling Fee – it is a necessity to have an eWaste account if you sell or lease covered electronic devices, such as computer monitors, laptops, computers, and even portable DVD players with LCD screens. You will need to obtain this account after receiving your seller’s permit.
- International Fuel Tax Agreement – you must own an IFTA license, which is an abbreviation for International Fuel Tax Agreement if you are an interstate motor carrier reporting fuel taxes. Obtaining an IFTA license will allow a taxpayer to file one tax report that covers all member jurisdictions.
- Lead Acid Battery Fees – if you sell replacement lead-acid batteries at retail in California, you must register as a battery dealer and pay the California battery fee.
- Lumber Product Assessment – this law requires a 1% assessment on purchases of lumber products and engineered wood products for state usage, based on the selling price of these lumber products.
- Tire Fee – if you sell new tires, lease or rent motor vehicles, various different types of equipment, for example; construction equipment, farm equipment, and motorized equipment with new tires you must have a tire fee account. Your tire fee account must be obtained in addition to your seller’s permit.
- Underground Storage Tank – if you are an owner of an underground storage tank, you must register with the California Department of Tax and Fee Administration. You must file underground storage tank fee returns and pay any fee amounts due for the reporting period.
Sales Tax in California by County
The table below lists the 58 California counties that charge sales tax within the state. California’s sales tax is based on the base rate plus the county/district rate, so the rates below are indicative of the total California sales tax you will pay or have to collect from your customers.
| California Sales Tax Rates by County | Total California Sales Tax Rate | California State Sales Tax Rate |
|---|---|---|
| Alameda County Sales Tax | 9.25% | 7.25% |
| Alpine County Sales Tax | 7.25% | 7.25% |
| Amador County Sales Tax | 7.75% | 7.25% |
| Butte County Sales Tax | 7.25% | 7.25% |
| Calaveras County Sales Tax | 7.25% | 7.25% |
| Colusa County Sales Tax | 7.25% | 7.25% |
| Contra Costa County Sales Tax | 8.25% | 7.25% |
| Del Norte County Sales Tax | 7.5% | 7.25% |
| El Dorado County Sales Tax | 7.25% | 7.25% |
| Fresno County Sales Tax | 7.98% | 7.25% |
| Glenn County Sales Tax | 7.25% | 7.25% |
| Humboldt County Sales Tax | 7.75% | 7.25% |
| Imperial County Sales Tax | 7.75% | 7.25% |
| Inyo County Sales Tax | 7.75% | 7.25% |
| Kern County Sales Tax | 7.25% | 7.25% |
| Kings County Sales Tax | 7.25% | 7.25% |
| Lake County Sales Tax | 7.25% | 7.25% |
| Lassen County Sales Tax | 7.25% | 7.25% |
| Los Angeles County Sales Tax | 9.5% | 7.25% |
| Madera County Sales Tax | 7.75% | 7.25% |
| Marin County Sales Tax | 8.25% | 7.25% |
| Mariposa County Sales Tax | 7.75% | 7.25% |
| Mendocino County Sales Tax | 7.38% | 7.25% |
| Merced County Sales Tax | 7.75% | 7.25% |
| Modoc County Sales Tax | 7.25% | 7.25% |
| Mono County Sales Tax | 7.25% | 7.25% |
| Monterey County Sales Tax | 7.75% | 7.25% |
| Napa County Sales Tax | 7.75% | 7.25% |
| Nevada County Sales Tax | 7.5% | 7.25% |
| Orange County Sales Tax | 7.75% | 7.25% |
| Placer County Sales Tax | 7.25% | 7.25% |
| Plumas County Sales Tax | 7.25% | 7.25% |
| Riverside County Sales Tax | 7.75% | 7.25% |
| Sacramento County Sales Tax | 7.75% | 7.25% |
| San Benito County Sales Tax | 7.25% | 7.25% |
| San Bernardino County Sales Tax | 7.75% | 7.25% |
| San Diego County Sales Tax | 7.75% | 7.25% |
| San Francisco County Sales Tax | 8.5% | 7.25% |
| San Joaquin County Sales Tax | 7.75% | 7.25% |
| San Luis Obispo County Sales Tax | 7.25% | 7.25% |
| San Mateo County Sales Tax | 8.75% | 7.25% |
| Santa Barbara County Sales Tax | 7.75% | 7.25% |
| Santa Clara County Sales Tax | 8.5% | 7.25% |
| Santa Cruz County Sales Tax | 8.5% | 7.25% |
| Shasta County Sales Tax | 7.25% | 7.25% |
| Sierra County Sales Tax | 7.25% | 7.25% |
| Siskiyou County Sales Tax | 7.25% | 7.25% |
| Solano County Sales Tax | 7.38% | 7.25% |
| Sonoma County Sales Tax | 8.13% | 7.25% |
| Stanislaus County Sales Tax | 7.88% | 7.25% |
| Sutter County Sales Tax | 7.25% | 7.25% |
| Tehama County Sales Tax | 7.25% | 7.25% |
| Trinity County Sales Tax | 7.25% | 7.25% |
| Tulare County Sales Tax | 7.75% | 7.25% |
| Tuolumne County Sales Tax | 7.25% | 7.25% |
| Ventura County Sales Tax | 7.25% | 7.25% |
| Yolo County Sales Tax | 7.25% | 7.25% |
| Yuba County Sales Tax | 7.25% | 7.25% |
California Department of Tax and Fee Administration Contact Details
Most communication with the California Department of Tax and Fee Administration (CDTFA) can be conducted through their online services which are available 24/7, or via telephone which is possible between the hours of 8:00 am – 5 pm (Pacific Time) Monday through to Friday (with the exception of national and state holidays). Here are the main contact methods:
Here is the main address for the California Department of Tax and Fee Administration:
450 N St, Sacramento, CA 95814, United States
Telephone: 1-800-400-7115 (after calling this you will be directed to the specific California sales tax section of the CDTFA).
Website: https://www.cdtfa.ca.gov/
Email: https://www.cdtfa.ca.gov/email/
Here is the mailing address for the California Department of Tax and Fee Administration:
P.O. Box 942879
Sacramento, CA 94279
Various online services are available 24/7 on the website. If you would like to email the CDTFA directly click on the link above.
