Ultimate California Sales Tax Guide

Whether you find California sales tax rules tricky or you’re unsure about the filing deadlines, our guide will help you clear your confusion.

We'll tell you everything about calculating sales tax for each county and city in California. We'll also address a few essential sales tax questions, like how to handle sales tax collection and whether you qualify for it.

Plus, we'll introduce a reliable sales tax solution to ensure you remain compliant at every stage of the sales tax cycle.

California Sales Tax Rate Range 2024

The minimum state sales tax rate in California, United States, is 6.250%. 

Additionally, some counties, cities, and towns in California may impose local district taxes, which are added to this.

The maximum tax rate for each district is 1.000%. However, there are instances where tax rates of multiple districts are imposed on cities. For instance, Alameda County has multiple jurisdictions that impose a city tax of 0.5%. 

Some cities in Alameda County also have a special additional tax of 4% on revenue. 

So, the highest rate in California is 10.750% in cities like Albany, Hayward, and others in Alameda County.

In short, depending on your location, sales tax in California can range anywhere from 7.250% to 10.750%. 

How to Calculate Sales Tax in California

To calculate sales tax accurately in California, you'll have to add these rates:

• State tax
• District tax (also known as county/city tax)
• Special tax

Take San Francisco, for instance. 

The sales tax rate in San Francisco is 8.630%. This includes 

• The California state rate of 6.250%
• The San Francisco county rate of 1.000%
• A district tax of 1.380%

This brings the total sales tax to 8.635%. 

Want to know the sales tax rates in your city? Find it here.

Next, let’s see how you can collect sales tax in California.

Collecting California Sales Tax from Customers

Let’s explore how you can collect California state sales tax.

Do I Have to Collect California Sales Tax from Customers? 

If you're a retailer in California who meets the following conditions, you're liable to collect tax on sales revenue from your customers:

• You have a sales tax nexus in California.
• You sell taxable products or services in California and generate taxable income. 

What Creates Sales Tax Nexus in California?

You have sales tax nexus according to California tax law if you meet one of the following conditions:

• Economic Nexus: Businesses making a taxable income of more than $100,000, or 200 separate transactions to buyers in the state in the past 12 months.
• Physical Location: Businesses having a store, office, warehouse, or other place of business.
• Employee Location: Businesses with employees, contractors, salespeople, installers, other personnel, or a third-party affiliate in the state.
• Trade Shows: Businesses that sell and participate in tangible personal property and services in trade shows for more than 15 days in a year and make taxable sales of $100,000 and more. 

Learn more about the sales tax nexus and when you should collect sales tax. 

Do I Have to Collect Sales Tax from California Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?

Yes. 

Marketplaces like Amazon and Walmart must collect sales tax on behalf of third-party sellers, according to California tax law. 

If you have a sales tax nexus in California, remember that you are still required to collect sales tax on your other non-marketplace Californian sales.

Read more about what marketplace facilitator sales tax means for e-commerce sellers.

Taxable Products in California

Usually, most tangible personal property is subject to sales tax in California as well as in other states. 

This refers to items like clothing, toys, furniture, antiques and giftware. However, some states avoid taxes on necessities like medication and food items.

But what about intangible goods? 

Digital goods like movies, music, and eBooks, as well as SaaS products, are subject to sales tax in certain states but not in California. 

Let's take a detailed look at what items are taxed in California:

Are Groceries Taxable in California? 

Like most states, groceries are not taxable in California. 

Is Clothing Taxable in California? 

Yes, clothing is subject to sales tax in California. 

However, some charitable organizations or thrift stores that provide clothing to the needy are exempt from charging sales tax on those items. 

Are Digital Products Taxable in California?

California doesn't enforce a sales tax on digital goods. 

In the United States, digital goods generally consist of the following: 

• Video game downloads
• Movie and music downloads
• Ringtones
• Digital books and eBooks

Is Software-As-A-Service (Saas) Taxable in California?

California doesn't collect sales tax on SaaS products.

Since SaaS is a relatively new concept, many states haven't arrived at a conclusion on whether to collect sales tax on these products. 

However, SaaS companies are liable to pay income tax in California. 

Some states that tax SaaS products can even change their tax rates based on whether the product is used in a personal or commercial setting. 

Are Services Taxable in California?

Services are generally non-taxable in California. 

This includes services like digital marketing, content writing, videography, and software building.

However, there are some exceptions.

California follows the True Object concept. This means that the amount received for services that are a part of the sale or lease of tangible personal property (TPP) are taxable —- but only if the true object of the sale is the transfer of the TPP. 

However, if the true object is a service, sales tax does not apply even if you transfer some property.

Tax-exempt Items

According to the California Department of Tax and Fee Administration (CDTFA), several categories of items have a sales tax exemption. 

These are:

• Items considered necessities of life
• Items that provide a general public benefit
• Items that provide an industry benefit
• Items excluded by definition
• Other items

Some examples are:

• Sales of food for human consumption except those sold in a heated condition (except hot bakery items or hot beverages, such as coffee)
• The sale and use of animal life or feed for animal life, seeds, and plants, which normally constitute food for human consumption.
• Sales of prescribed medicines or medical supplies, like insulin syringes, breast pump-related products, and prosthetic devices.
• The sale of gas, electricity, and water, including steam and geothermal steam, brines, and heat delivered through mains, lines, or pipes.

Now, if your business has nexus in California and sells taxable products in California — you'll need to obtain a California sales tax license. Let's take a look at how you can get one. 

How to Register for a California Seller's Permit

You can register for a California seller's permit online at the California Department of Tax and Fee Administration website.

Explore how to register for a sales tax permit in every US state.

Do I Need a California Seller's Permit if I'm Only a Wholesaler? 

Yes. 

Even if wholesalers don't sell directly to consumers and aren't required to collect sales tax, they still need to get a seller's permit in California. This is also known as a California resale certificate or California sales tax exemption certificate. 

Do I Need a California Seller's Permit if I Only Sell Temporarily in the State?

Yes. 

Seasonal or temporary sellers, like Christmas tree farms or craft fair vendors, are required to register for a temporary California seller's permit. These permits are generally only issued if your sales activity lasts no longer than 30 days at one location. 

How to Collect Sales Tax in California

California has two different tax types that apply to most sales:

• Sales and use tax
• District transaction tax (this includes cities/local governments, counties, and other special taxing jurisdictions)

The California sales tax collection works differently based on buyer and seller locations. 

A. How to Collect Sales Tax on Intrastate California Sales

A California sale is considered “intrastate” if the buyer and seller are both located in California. In this case, you should charge the sales tax rate of the sale’s origination point. 

You also need to collect district taxes on sales made to buyers who live in the same district where you "engage in business." 

But if the buyer is from outside the district where your business is located, then you are only required to charge the California state sales tax rate to those buyers. 

For instance, let’s say your business is located in Bodema, Sonoma County, and sells to a buyer in Beverly Hills, Los Angeles County, then you should charge them the California state sales tax. 

B. How to Collect Sales and Use Tax on Interstate California Sales

A California sale is considered "interstate" if the item ships from outside California and the seller isn't otherwise engaged in business in the state. 

In this case, the seller generally collects sales tax based on the rate at the buyer's location.  

For example, your business is located in Leander, Idaho, and sells to a buyer in San Diego, California. You’d charge the buyer the combined state and local San Diego sales tax rate.

For more information, explore the California Tax Guide for Out-of-State Retailers. 

Should You Collect Sales Tax on Shipping Charges in California? 

No. 

Shipping charges are not subject to sales tax in California as long as the delivery is made by a common carrier, U.S. mail, or an independent contractor. 

However, this only applies if the shipping charge is the same as the actual charge for delivery. 

Now, let's look at how you can pay and file your sales taxes in California.

How to File and Pay Sales Tax in California

When you register for a California seller's permit, the state tax authority assigns your due dates and a filing frequency (monthly, quarterly, or annually). 

California also has a unique “Quarterly Prepay” sales tax filing basis. This is where retailers are required to “prepay” sales tax monthly but only file returns every quarter. 

When your sales tax due date rolls around, you'll have to calculate how much sales tax you collected from buyers in the state and each district. 

Then, you can file your California sales tax return online at the California Department of Tax and Fee Administration website. You'll be asked to pay your sales tax amount due after filling out the sales and use tax return.

Here’s a better solution:

Let Zamp handle your California state sales tax filing and remittance so you never have to look at a sales tax return again! 

FAQs on Paying and Filing California Sales Tax

Here are the answers to some of the most common questions on collecting state tax in California:

What Is Use Tax?

While sellers in California have to pay tax on sales revenue from items they sell, buyers don't always purchase items from California. 

That's where the California use tax comes into play. 

When Californian buyers (businesses or residents) purchase tangible goods or personal property outside the state for use in California, they're liable to pay use tax. 

The California use tax is charged at the same rate as sales tax and only applies when sales tax is not charged on a transaction. 

Californian buyers can pay use tax along with their annual corporate and personal income tax to the California Franchise Tax Board.

I Didn't Collect Any California Sales Tax This Period. Do I Still Need to File a Return?

Yes. 

Though there are no penalties associated with not filing a “zero return”, you’ll continue to receive notices from the state until you file a return. 

Failing to respond to these notices may result in the cancellation of your seller's permit. 

What Is the Penalty for Filing and/or Paying California Sales Tax Late?

California levies a 10% penalty for failing to file sales tax on time and a 10% penalty for failing to pay on time.

Can I Get an Extension on Filing My California Sales Tax Return? 

Yes, you may request a filing extension for up to one month after the sales tax return due date. This also means any penalties will be waived. 

Can I Amend a California Sales Tax Return? 

If you make a mistake on your California sales tax return, you can contact the CDTFA to amend your tax return.

This could be in the form of extra sales and use tax, penalties, and interest. Or it could mean that you are due a refund or a credit on your next sales and use tax payment. 

How Often Will I Be Required to File and Pay Sales Tax in California?

In California, the higher your tax liability, the more often you'll be required to file and pay. 

For example, businesses with an average tax liability of over $17,000 per month must prepay their taxes monthly and submit a quarterly return. 

California Sales Tax Due Dates

Below are California's sales tax filing due dates for 2024. 

Due dates that fall on the weekend or holidays are due the following business day.

Taxable Period	Filing Due Date
January 2024	February 29, 2024
February 2024	April 1, 2024
March 2024	April 30, 2024
April 2024	May 31, 2024
May 2024	July 1, 2024
June 2024	July 31, 2024
July 2024	September 2, 2024
August 2024	September 30, 2024
September 2024	October 31, 2024
October 2024	December 2, 2024
November 2024	December 31, 2024
December 2024	January 31, 2025

California Quarterly Prepay Sales Tax Filing Due Dates

Reporting Period	Prepayment Due Date	Filing and Payment Due Date
January, 2024	February 26, 2024
February, 2024	March 25, 2024
Q1 2024		April 30, 2024
April 2024	May 24, 2024
May 1 - June 15,  2024	June 24, 2024
Q2 2024		July 31, 2024
July 2024	August 26, 2024
August 2024	September 24, 2024
Q3 2024		October 31, 2024
October 2024	November 25, 2024
November 2024	December 24, 2024
Q4 2024		January 31, 2025

California Quarterly Sales Tax Filing Due Dates

Taxable Period	Filing Dates
Q1 (Jan-March) 2024	April 30, 2024
Q2 (Apr-June) 2024	July 31, 2024
Q3 (July-Sept) 2024	October 31, 2024
Q4 (Oct-Dec) 2024	January 31, 2025

California Annual and Fiscal Annual Sales Tax Filing Due Dates

Taxable Period	Filing Date
July 1, 2024 - June 30, 2025	July 31, 2025
January 1, 2024 - December 31, 2024	January 31, 2024

Let the Experts Handle Your California Sales Taxes

The sales tax filing process can be very resource-intensive. 

To manage the process accurately, you will have to spend time and money that could otherwise be spent running your core operations. 

With a white-glove solution like Zamp, you'll never have to bother about the sales tax process again! Just let the platform and our team of sales tax experts handle all the work so you can focus on running your business. 

Get in touch with Zamp today!