How California Sales Tax Works and What You Pay

What California sales tax is and who collects it

California sales tax is a tax on the purchase of goods and some services. When you buy something at a store, online, or from a business, the seller adds this tax to your bill. The seller then sends that tax money to the state and to your local county or city government.

The state of California sets a base sales tax rate, but your actual rate depends on where you live. Your county and city may add their own local sales taxes on top of the state rate. This means the total sales tax you pay varies by location — someone buying the same item in San Francisco pays a different rate than someone buying it in rural Kern County.

The business collecting the tax — the store, restaurant, gas station, or online seller — is responsible for sending it to the California Department of Tax and Fee Administration (CDTFA). You do not send sales tax directly to the government yourself.

Key Takeaways

• California's base state sales tax rate is 7.25 percent, but your total rate includes local taxes and ranges from 7.25 percent to over 10 percent depending on your county and city.
• Sales tax applies to most goods you buy in stores and online, but not to groceries, prescription medications, or most services like haircuts or car repairs.
• The seller collects and pays the tax to the state and local government, not you directly.
• Online purchases from out-of-state sellers are subject to California sales tax if the seller has a physical presence or meets certain sales thresholds in the state.

How the California sales tax rate is built

California's sales tax has layers. The state portion is 7.25 percent. On top of that, your county adds a rate (which varies from 0 to 1.25 percent depending on the county), and your city or local district may add another layer (ranging from 0 to 1.5 percent or more). Some special districts, like transit authorities or sales tax districts, add additional fractions of a percent.

Your total rate is the sum of all these layers. In some areas of California, the combined rate is 7.25 percent (just the state rate). In others, it reaches 10.5 percent or higher. You can find your exact local rate by entering your zip code on the CDTFA website or by asking a local business.

The rate in your area can change if voters approve a new local tax measure or if a temporary tax expires. Rates also differ between neighboring cities, so it is worth checking before making a large purchase if you are near a city border.

What items and services are taxed

Most physical goods sold in California are subject to sales tax — clothing, electronics, furniture, toys, books, and household items. When you buy these at a store or online, tax is added to your purchase price.

Some items are not taxed. Groceries — unprepared food you cook at home — are exempt. This includes produce, meat, dairy, bread, and canned goods. Prescription medications are also exempt. Over-the-counter medicines like aspirin or cold medicine are taxed, but prescription drugs are not.

Most services are not taxed. A haircut, car repair, dental cleaning, or plumbing job does not have sales tax added. However, some services that include a product do get taxed — for example, a restaurant meal is taxed because you are buying prepared food, not just a service. Installation services sometimes are taxed and sometimes are not, depending on what is being installed and how the transaction is structured.

How sales tax works for online and out-of-state purchases

If you order something online from a California business, sales tax is added based on the delivery address. If you order from an out-of-state seller, California sales tax still applies if that seller has a nexus in California — meaning they have a warehouse, office, employees, or other physical presence in the state. Many large online retailers meet this threshold and collect California sales tax on orders shipped to California addresses.

If an out-of-state seller does not have a physical presence in California and does not collect sales tax, you may owe use tax instead. Use tax is a tax on goods you bring into California or have delivered to you from out of state. Most people do not pay use tax because it is difficult to track and enforce, but it is technically owed on taxable purchases from sellers who did not collect sales tax.

The rules changed in 2019 when the U.S. Supreme Court ruled that states can require online sellers to collect sales tax even without a physical presence. Since then, most major online retailers collect California sales tax. If you are unsure whether tax was collected on an online purchase, check your receipt or contact the seller.

Who does not pay sales tax and when

Certain groups and situations are exempt from paying sales tax. Nonprofits with a valid California tax exemption certificate do not pay sales tax on purchases for their organization. Resellers — businesses that buy goods to resell them — do not pay sales tax on their wholesale purchases if they provide a resale certificate to the seller.

Some purchases are exempt for specific reasons. Items purchased with a valid food stamp benefit (CalFresh) are not taxed. Certain medical equipment and mobility aids may be exempt. Farmers buying equipment for agricultural use may may have access to for exemptions. If you think a purchase should be exempt, ask the seller or contact the CDTFA to confirm.

How to find your local sales tax rate

Your sales tax rate depends on your exact location — your city and county matter. The easiest way to find your rate is to visit the CDTFA website and use their sales tax rate lookup tool. Enter your zip code or address, and the tool shows your combined state and local rate.

You can also call a local business in your area and ask what rate they charge, or check a recent receipt from a purchase you made locally. The receipt shows the tax rate applied. If you are shopping near a city or county border, rates can differ by a full percentage point or more, so it is worth checking if you are making a large purchase.

Frequently Asked Questions

Do I pay sales tax on groceries in California?

No. Unprepared food you buy to cook at home — produce, meat, dairy, bread, and canned goods — is not taxed. However, prepared food like restaurant meals, deli items, and hot foods are taxed. If you are unsure whether an item is taxed, ask the cashier or check your receipt.

Why is my sales tax rate different from the city next to mine?

Each city and county in California sets its own local sales tax rate on top of the state rate. A city a few miles away may have a different city rate or be in a different county, resulting in a different total. Rates can vary by more than one percentage point between neighboring areas.

Do I owe sales tax on items I buy online from out of state?

If the seller has a physical presence in California or meets certain sales thresholds, they must collect California sales tax. If they do not, you technically owe use tax, though it is rarely enforced for individual purchases. Most major online retailers now collect sales tax on California orders.

Is sales tax added to prescription medications?

No. Prescription drugs are exempt from California sales tax. Over-the-counter medications like aspirin, cold medicine, and pain relievers are taxed as regular goods. Your pharmacist can tell you whether a specific medication is taxed.

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

Sales tax refunds are rare and usually only happen if you return an item to the store where you bought it. If you paid sales tax on something you later returned, the store refunds the tax along with the purchase price. For other situations, contact the CDTFA directly.