Tax Rate FAQ for Sales and Use Tax

The sales and use tax rate varies depending where the item is bought or will be used. There may be more than one district tax in effect in a specific location. In most areas of California, local jurisdictions have added district taxes that increase the tax owed by a seller.

1. You are generally required to pay the district use tax in your customer’s district, if you are « engaged in business » in the district in which you deliver the merchandise (See FAQ #5).
2. If you make sales of a temporary nature (such as Christmas tree sales or sales at craft fairs), you may apply for a temporary seller’s permit.
3. In the map of California above, the 58 counties in California are colorized based on the maximum sales tax rate that occurs within that county.
4. State and local governments should be cautious about raising rates too high relative to their neighbors because doing so will yield less revenue than expected or, in extreme cases, revenue losses despite the higher tax rate.
5. Certain businesses are required to obtain permits from the California Department of Consumer Affairs and state and local environmental agencies.

We represent this anomaly as a negative 0.03 percent statewide average local rate (adjusting for population as described in the methodology section below), and the combined rate reflects this subtraction. Sales Tax Clearinghouse publishes quarterly sales tax data at the state, county, and city levels by ZIP code. We weight these numbers according to the most recent Census population figures to give a sense of the prevalence of sales tax rates california city and county sales and use tax rates in a particular state. This is a change from previous editions, where we used figures available every decade. While changes due to the new weighting were mostly trivial, we show changes in rank based on January 1 figures recalculated under the new population weighting. Due to the updated population weighting, this report is not strictly comparable to previously published editions, though differences amount to minor rounding errors.

To assist retailers and consumers in identifying addresses located within special taxing jurisdictions, some cities have developed an online database of addresses. In cooperation with these cities, our webpage, California City and County Sales and Use Tax Rates provides a link to their address databases. If you have questions about the addresses, you should contact the cities directly.

California City and Locality Sales Taxes

This report provides a population-weighted average of local sales taxes as of January 1, 2024, to give a sense of the average local rate for each state. Table 1 provides a full state-by-state listing of state and local sales tax rates. The sales and use tax rates vary depending on your retail location. A base sales and use tax rate of 7.25 percent is applied statewide.

Please refer to the Tax Guide for Temporary Sellers for more information on the temporary seller’s permit. For a more detailed explanation of what is taxable, please see Applying Tax to Your Sales and Purchases and Your California Seller’s Permit (Publication 73) (PDF). For more information on exempt sales, see Nonprofit/Exempt Organizations. You may be eligible for a credit of tax paid to another district (or state for out-of-state purchases), but only up to the amount of tax due in the district of use.

Temporary Sellers

Some counties and cities publish special guides for small businesses, available free or at a low cost. The state and federal governments have additional requirements for businesses. Certain businesses are required to obtain permits from the California Department of Consumer Affairs and state and local environmental agencies. https://personal-accounting.org/ You will probably need to obtain a business license or other permits from the county or city where you operate. Retail sales of tangible personal property in California are generally subject to sales tax. Examples of tangible personal property include such items as furniture, giftware, toys, antiques and clothing.

Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections). The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S.
, because they introduce fewer economic distortions.

California has 2,558 cities, counties, and special districts that collect a local sales tax in addition to the California state sales tax. Click any locality for a full breakdown of local property taxes, or visit our California sales tax calculator to lookup local rates by zip code. If you need access to a database of all California local sales tax rates, visit the sales tax data page. Forty-five states impose state-level sales taxes, while consumers also face local sales taxes in 38 states, including Alaska, which does not impose a statewide tax. These local rates can be substantial, and some states with moderate statewide sales tax rates actually impose quite high combined state and local rates compared to other states.

State and Local Sales Tax Rates, 2020

As a registered seller, you will need to take the time to learn how to properly apply the sales and use tax law in your business operations. And you must keep adequate records that document your sales and purchases. As a seller, you may also accept resale certificates from other sellers who wish to purchase tangible personal property from you for resale purposes. Combined with the state sales tax, the highest sales tax rate in California is 10.75% in the cities of Hayward, San Leandro, Alameda, Union City and Fremont (and ten other cities). [3] The sales taxes in Hawaii, New Mexico, and South Dakota have bases that include many business services and so are not strictly comparable to other sales taxes.

In the map of California above, the 58 counties in California are colorized based on the maximum sales tax rate that occurs within that county. Counties marked with a in the list below have a county-level sales tax. Avoidance of sales tax is most likely to occur in areas where there is a significant difference between jurisdictions’ rates. Research indicates that consumers can and do leave high-tax areas to make major purchases in low-tax areas, such as from cities to suburbs. For example, evidence suggests that Chicago-area consumers make major purchases in surrounding suburbs or online to avoid Chicago’s 10.25 percent sales tax rate. If your business is located outside a district, your over-the-countersales are not subject to transactions tax.

Rates change often as voters approve new tax districts and old districts expire. We provide recent updates in Special Notices and on the California City & County Sales & Use Tax Rates webpage. You will be charged the sales and use tax in effect at the time of your purchase. If you make sales of a temporary nature (such as Christmas tree sales or sales at craft fairs), you may apply for a temporary seller’s permit. Temporary permits are issued to those whose sales activity will last no longer than 30 days.

You may not be liable for a district’s (transactions) sales tax on sales made when you accept a declaration in good faith as provided in Regulation 1823.5, Place of Delivery of Certain Vehicles, Aircraft, and Undocumented Vessels. You are generally not required to pay for your district’s tax if the customer does not take possession of the property in your district. The transactions (sales) tax does not apply to property sold within a district but is shipped or delivered, as agreed to in the contract of sale, to a point outside the district. For a more detailed explanation of district taxes, read District Taxes (Publication 44); District Taxes and Delivered Sales (Publication 105), and Applying Tax To Your Sales and Purchases. However, certificates are available in many office supply and stationery stores (you should ensure that the certificates are designed to provide the required information noted above). A CDTFA-approved resale certificate may be taken from Sales for Resale (Regulation 1668).