California sales tax is a tax on purchases of goods and some services, collected at the point of sale by the retailer and sent to the state

When you buy something in California, the retailer adds sales tax to your bill at checkout. That tax rate varies by location — it ranges from 7.25% to over 10% depending on your county and city — because California combines a state base rate with local add-ons. The retailer collects the money and sends it to the California Department of Tax and Fee Administration (CDTFA), which distributes portions to the state, county, and city governments.

Sales tax is different from income tax. Income tax is based on what you earn; sales tax is based on what you spend. You pay sales tax only on the specific purchase, not on your total spending for the year. There is no annual filing or refund process for sales tax as a consumer — the tax is final when you pay it at the register.

Key Takeaways

  • California's sales tax rate starts at 7.25% statewide but reaches 10% or higher in many counties and cities because of local add-ons.
  • Retailers collect and remit sales tax; you pay it at the point of sale and cannot recover it later.
  • Most goods are taxable, but groceries, prescription medications, and some medical equipment are exempt.
  • Services are generally not taxed in California unless they are specifically listed as taxable, such as repairs to tangible property.
  • If you run a business, you must register with the CDTFA and collect sales tax from customers, then file returns monthly or quarterly depending on your sales volume.

How the California sales tax rate is built

The state base rate is 7.25%, set by California law. On top of that, counties add their own rate (ranging from 0.25% to 1.25%), and cities or special districts can add more. The result is that your actual rate depends on your exact location. A purchase in Los Angeles County might be taxed at 9.5%, while the same purchase in a different county could be 8.625%.

You can find your local rate on the CDTFA website by entering your address, or you can ask the retailer. The rate applies to the total purchase price before any discounts or coupons are applied — though some coupons reduce the taxable amount.

What is and is not taxable in California

Most physical goods are taxable. Clothing, electronics, furniture, and vehicles all carry sales tax. However, certain necessities are exempt. Groceries — unprepared food you cook at home — are not taxed. Prescription medications are exempt, as are certain medical devices like diabetic testing supplies and prosthetics. Over-the-counter medications and vitamins are taxable.

Services are usually not taxed unless they result in a tangible product. A haircut is not taxed, but if the salon sells you a bottle of shampoo, that bottle is taxed. Repair services are taxable — fixing a car, repairing a phone, or servicing an appliance all carry sales tax. Labor charges for installation, assembly, or repair are included in the taxable amount.

Digital goods and subscriptions have specific rules. Streaming services, software downloads, and digital books are generally taxable. Shipping and delivery charges are taxable if the underlying product is taxable.

When you do not pay sales tax

You do not pay sales tax on items that are exempt by law, such as groceries and prescription medications. You also do not pay sales tax if you buy something outside California and bring it home — the sale itself is not subject to California tax, though if you later sell that item in California, the buyer pays tax.

If you are a registered reseller — someone who buys goods to resell them — you can provide a resale certificate to avoid paying sales tax on your purchases. The tax is then collected from the final customer instead. This applies to retailers, wholesalers, and manufacturers.

Some nonprofits and government agencies may be exempt from sales tax on certain purchases, but this requires documentation and is not automatic.

Sales tax if you run a business

If you sell goods or taxable services in California, you must register with the CDTFA and collect sales tax from your customers. Registration is free and can be done online through the CDTFA website. Once registered, you receive a seller's permit, which you must display at your place of business.

You then file sales tax returns with the CDTFA. The filing frequency depends on your sales volume: high-volume sellers file monthly, while smaller businesses may file quarterly or annually. You report the total sales, the tax collected, and any deductions (such as exempt sales), then send the tax owed to the state. If you collected more tax than you owe, you may receive a refund, though this is rare.

Failure to register or file returns can result in penalties and interest. The CDTFA also conducts audits of businesses to verify that sales tax was collected and reported correctly.

How sales tax differs from use tax

Use tax is a companion to sales tax. It applies when you buy something outside California but use it inside the state, or when you buy something in California but the retailer did not collect sales tax. Use tax is the same rate as sales tax in your location, and you owe it to California even though it was not collected at the register.

Most consumers do not file use tax returns because the amounts are small and enforcement is limited to businesses and high-value purchases. However, if you buy a car out of state and register it in California, you will pay use tax at the Department of Motor Vehicles. If you buy items online from a retailer that does not collect California sales tax, you technically owe use tax on those purchases, though you would need to report it on your state tax return.

Frequently Asked Questions

Why does the sales tax rate vary by city and county?

California allows counties and cities to add their own sales tax rates on top of the 7.25% state base. This gives local governments a way to fund services without raising income or property taxes. Each jurisdiction sets its own rate, so rates can differ significantly even between neighboring cities.

Do I have to pay sales tax on online purchases?

Yes, if the retailer has a physical presence in California or meets certain sales thresholds, they must collect and remit California sales tax. Most major online retailers now collect sales tax on California purchases. If a retailer does not collect it, you technically owe use tax on the purchase, though this is rarely enforced for individual consumers.

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

No. Sales tax is final when you pay it. You cannot recover it later, even if you return the item. If you return a purchase and receive a refund, the sales tax is refunded as part of that refund, but you cannot claim a separate tax deduction for sales tax paid on personal purchases.

Are services like haircuts and restaurant meals taxed?

Haircuts and most personal services are not taxed. Restaurant meals are taxed on the food and beverages, but not on the labor or tip. Prepared food sold for when ready consumption — including restaurant meals, deli items, and hot food from a grocery store — is taxable.

What happens if a business does not collect sales tax?

The business is liable for the unpaid tax plus penalties and interest. The CDTFA can audit businesses and assess back taxes. Customers are not responsible for the business's failure to collect, though they may owe use tax if the retailer did not charge sales tax.