California sales tax is a tax on goods and some services, collected at the point of sale

California's statewide sales tax rate is 7.25%, but the rate you actually pay depends on where you buy. Your county and city may add their own sales tax on top of the state rate, so the total can range from 7.25% to over 10% depending on your location. The tax is collected by the seller at checkout and sent to the California Department of Tax and Fee Administration (CDTFA), which distributes it to the state, county, and city governments.

Unlike income tax, which is based on what you earn, sales tax is based on what you spend. You pay it when you purchase most physical goods — clothing, groceries, electronics, furniture — and certain services like repairs and installations. Some items are exempt, and some purchases are taxed differently depending on what they are and where you live.

Key Takeaways

  • California's base sales tax is 7.25%, but your actual rate includes county and city additions that vary by location.
  • Groceries, prescription medications, and medical equipment are generally exempt from sales tax in California.
  • Services like haircuts, repairs, and labor are often taxable, but the rules depend on what type of service and what is being worked on.
  • Online purchases from out-of-state sellers are subject to California sales tax if the seller has a physical presence in the state or meets certain sales thresholds.

How the 7.25% base rate breaks down by location

The 7.25% statewide rate consists of 6.25% that goes to the state and 1% that goes to counties. On top of that, individual cities and special districts can add their own local tax. A city might add 0.5% to 1.5%, and some areas have multiple overlapping districts that each add a small percentage. This means two people buying the same item in different California cities will pay different amounts of tax.

To find your exact local rate, you can enter your address on the CDTFA website or ask a retailer. The rate can change if you move or if your city passes a new tax measure. Some cities update their rates annually, so the rate you paid last year may not be the rate you pay this year.

What is taxed and what is not

Most physical goods are taxable: clothing, electronics, furniture, toys, and household items all have sales tax added at checkout. However, groceries intended for home consumption — bread, milk, vegetables, canned goods — are exempt. Prepared food from a restaurant or deli counter is taxed, but the same items bought raw from a grocery shelf are not.

Prescription medications and certain medical devices are exempt. Over-the-counter medications like aspirin or cold medicine are taxable. Services are more complicated: a haircut is taxable, but a doctor's visit is not. Repairs to tangible goods — fixing a car, repairing a phone, tailoring clothes — are generally taxable. Labor to install something you bought is usually taxable as well.

Some services fall into gray areas. Dry cleaning is taxable. Laundry services are not. Pest control is taxable. Landscaping maintenance is not, but landscaping design is. The CDTFA publishes detailed rules, but when in doubt, the retailer or service provider should be able to tell you whether tax applies.

How sales tax is collected and who pays it

The seller collects sales tax from you at the point of sale — either at a physical register or during online checkout. The seller is responsible for sending that tax to the CDTFA, usually monthly or quarterly depending on how much tax they collect. You do not send the tax yourself; the business handles it.

From your perspective, the tax is added to your bill. If an item costs $100 and your local rate is 8.5%, you pay $108.50. The seller keeps the $100 and sends $8.50 to the state and local governments. Some retailers show the tax separately on the receipt; others include it in the total. Either way, you are paying it.

Online purchases and out-of-state sellers

If you buy from an online retailer that has a warehouse, office, or other physical presence in California, that seller must collect California sales tax from you. If the seller does not have a physical presence in California but has made more than $100,000 in sales to California residents in the past year, they must also collect the tax. This applies even if the seller is based in another state.

If you buy from a small out-of-state seller with no California presence and low sales volume, they may not collect California sales tax. In that case, you may owe "use tax" — a tax on goods you bring into California or have shipped to you. Use tax is the same rate as sales tax and goes to the same place. Most people do not report use tax on individual purchases, but it is technically owed.

Differences between sales tax and other California taxes

Sales tax is separate from income tax. Income tax is based on your wages and other earnings and is withheld by your employer or paid when you file your tax return. Sales tax is based on what you spend and is collected at the register. You can owe both: you pay income tax on your paycheck and sales tax when you spend it.

Sales tax is also different from excise tax. California charges extra tax on gasoline, alcohol, and cigarettes — these are excise taxes, not sales taxes, and the rates are much higher. A gallon of gas includes both the regular sales tax and a separate excise tax. These are collected the same way (at the pump or register) but are tracked separately by the state.

Who the CDTFA is and what they do

The California Department of Tax and Fee Administration is the state agency that administers sales tax. They set the rules for what is taxable, audit businesses to make sure they are collecting and reporting correctly, and distribute the tax revenue to state and local governments. If you have a question about whether something should be taxed, the CDTFA website has detailed guidance, and you can contact them directly.

Businesses register with the CDTFA to get a seller's permit before they can legally collect sales tax. The CDTFA also handles disputes between businesses and the state about tax owed. As a consumer, you do not interact with the CDTFA directly — the business does — but understanding that they exist and what they do helps explain how the system works.

Frequently Asked Questions

Why does sales tax vary by city if it is a state tax?

The 7.25% base is statewide, but cities and counties can add their own local tax to fund local services. A city might use local sales tax for schools, roads, or public safety. This is why two cities in the same county can have different rates.

Do I pay sales tax on groceries in California?

No, groceries for home consumption are exempt. This includes bread, milk, produce, canned goods, and frozen vegetables. Prepared food from a restaurant, deli counter, or bakery is taxed. The rule is whether the food is ready to eat or requires preparation at home.

What happens if a business does not collect sales tax?

The CDTFA can audit the business and require them to pay back taxes plus penalties and interest. If you paid sales tax and the business did not report it, you are not liable — the business is responsible for collecting and sending it to the state.

Do I owe California sales tax on items I buy while traveling out of state?

If you bring items into California or have them shipped to you, you may owe use tax. However, if you bought the items in another state and paid that state's sales tax, you generally do not owe California tax on top of it. Use tax is meant to prevent tax avoidance, not to double-tax.

Is sales tax deductible on my income tax return?

You cannot deduct sales tax paid on personal purchases. However, if you are self-employed or own a business, sales tax you pay on business supplies and equipment may be deductible as a business expense. This is different from the sales tax you collect from customers, which you send to the state.