Everything you need to know about California state sales and use tax
What is the sales tax rate in California?
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The California sales tax rate is currently 7.5%. In California, each county, city and special district can add sales taxes on top of the state rate.
Taxes in California are modified-origin, meaning the sales tax rate is based, or determined from, the origin location for state, county, and city portions of the tax, but special district taxes are determined by the destination location
To see a full breakout of sales tax rates in CA by state, county, city and special district, use our easy California sales tax calculator. After putting in any ZIP code, you can enter a retail price to calculate sales tax totals.
What is the use tax in California?
The California state use tax rate is the same as the state, county, city and special district rates.
If you reside in CA, use tax is due to the state on any and all transactions where sales tax has not been paid, even out-of-state internet sales.
Who has to pay sales or use tax to California?
In general, a business must collect and remit all applicable sales taxes if that business has nexus, a physical presence such as a brick-and-mortar location, within a given state. The presence of an employee or salesperson, delivery by the seller's vehicle, and storage of materials usually establishes nexus as well.
California says that an out-of-state seller is required to collect tax if they can be defined as a "retailer engaging in business". California has certain additional laws establishing nexus for other reasons such as out-of-state businesses using in-state affiliates, advertisers or vendors, or businesses that make internet sales or mail catalogs.
If you are not sure if you have established nexus in California, you can usually get free help by contacting the California State Board of Equalization . Click here for an updated listing of direct phone numbers. You could also contact a qualified certified public accountant or lawyer who specializes in tax law in California. Click here for listing of recommended resources.
Special rules applying to
sales and use taxes in California
- Shipping is not taxable.
- Finance charges are exempt from sales tax, when stated separately.
- Clothing is taxable, except for certain exemptions.
- Sales tax holidays are not planned for this state.
Since California legislators can vote to change sales and use tax rates at any time, it is very difficult for individuals to keep track of the changes. The population of CA state is also rapidly changing, which can cause frequent updates to the ZIP codes and local municipality names and complicates the job of keeping track of sales tax jurisdictions.