How California Sales Tax Works and What You Pay

California sales tax is a tax added to the price of most goods when you buy them at a store or online

When you purchase something in California, the retailer collects a sales tax at checkout and sends it to the state. The tax rate varies by location because California combines a statewide rate with local taxes that cities and counties add on top. You do not pay sales tax on groceries, prescription medications, or most services — only on tangible goods like clothing, electronics, furniture, and prepared food.

The statewide base rate is 7.25 percent, but your actual rate depends on which city and county you live in or are shopping in. A purchase in Los Angeles might have a different total rate than the same purchase in San Francisco or a rural area. The retailer is responsible for knowing the correct rate for their location and charging you accordingly.

Key Takeaways

• California's statewide sales tax base is 7.25 percent, but local taxes add to this amount, making your actual rate between 7.25 and over 10 percent depending on your location.
• Sales tax applies to most goods but not to groceries, prescription drugs, or most services like haircuts or repairs.
• The retailer collects the tax at the point of sale and remits it to the state and local tax authorities.
• Online purchases from out-of-state sellers may or may not have California sales tax added, depending on whether the seller has a physical presence in the state.

How the statewide rate and local taxes combine

California starts with a 7.25 percent statewide sales tax. On top of that, counties and cities can add their own local sales taxes. These local rates range from 0.1 percent to over 2 percent depending on where you are. A county might add 1 percent, and then a city within that county might add another 0.5 percent, so your total rate becomes 8.75 percent.

You can find your exact local rate by entering your zip code on the California Department of Tax and Fee Administration website, or by asking a cashier at a store in your area. The rate can even vary between neighborhoods in the same city if different districts have different local taxes. When you shop online, the retailer should charge the rate for the address where the item is being delivered.

What is and is not taxed

Most physical items you buy are taxed: clothing, shoes, electronics, furniture, toys, books, and household goods. Prepared food — like restaurant meals, deli sandwiches, or coffee from a café — is taxed. However, unprepared groceries like raw vegetables, meat, bread, and milk are not taxed, even if you buy them at the same store.

Services are generally not taxed in California. A haircut, car repair, plumbing work, or medical visit does not have sales tax added. However, if you buy a product as part of a service — like paint that a contractor applies to your house — the product portion may be taxed. Prescription medications are not taxed, but over-the-counter drugs and vitamins are. Digital goods like e-books, music downloads, and streaming subscriptions are taxed.

How online purchases are handled

If you order from a retailer that has a physical store, warehouse, or office in California, the retailer must charge you California sales tax based on your delivery address. This includes large online retailers like Amazon, which have distribution centers throughout the state. The tax is added to your order total before checkout.

If you order from a small out-of-state seller with no California presence, they may not charge California sales tax at checkout. However, you are technically responsible for paying "use tax" — which is essentially the same as sales tax — on that purchase when you file your state income tax return. Most people do not report this, but it is the law. Some states have started requiring online marketplaces to collect this tax on behalf of third-party sellers, and California has similar rules for certain platforms.

Who collects and where the money goes

The retailer collects sales tax from you at the register or during online checkout. They then send the tax revenue to the California Department of Tax and Fee Administration on a monthly or quarterly schedule, depending on the retailer's size and sales volume. The state keeps the 7.25 percent statewide portion and distributes the local portions to the appropriate counties and cities.

Local tax revenue funds city and county services like schools, roads, public safety, and libraries. The statewide portion goes into the state's general fund. Retailers are required to keep records of all sales tax collected in case of an audit.

Sales tax on specific situations

If you buy something out of state and bring it into California, you do not owe sales tax on it — you already paid tax in the state where you bought it. However, if you order something from out of state and have it shipped to California, the rules above explore: if the seller has a California presence, they charge tax; if not, you technically owe use tax.

Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell those items. A clothing store, for example, does not pay sales tax when buying inventory from a wholesaler. The tax is paid later when the customer buys the finished item. If you are starting a business, you can obtain a resale certificate from the California Department of Tax and Fee Administration.

Frequently Asked Questions

What is the sales tax rate in my city?

Your rate depends on your zip code and can range from 7.25 percent to over 10 percent. The California Department of Tax and Fee Administration has a tax rate lookup tool on their website where you enter your zip code and see your exact combined state and local rate.

Why do I see different tax rates at different stores?

Stores in different cities or counties have different local tax rates added on top of the statewide 7.25 percent. Even two stores in the same county might charge different rates if they are in different cities with different local taxes. The retailer must charge the rate for their location.

Do I pay sales tax on groceries?

No. Unprepared groceries like vegetables, meat, bread, milk, and eggs are not taxed. However, prepared foods like hot deli items, restaurant meals, and bakery items that are ready to eat are taxed. If you are unsure whether something counts as prepared food, ask the cashier.

Can I get a refund of sales tax I already paid?

Generally, no. Sales tax is final once you complete a purchase. If you return an item and get a refund, the sales tax is refunded as part of that refund. If you believe you were charged the wrong rate, contact the retailer or the California Department of Tax and Fee Administration.

Do I owe California sales tax on items I buy from another state online?

If the seller has no physical presence in California, they typically do not charge California sales tax at checkout. However, California law says you owe use tax on that purchase, which you can report on your state income tax return. Most online sellers with warehouses or offices in California do charge the tax automatically.