Sales tax rate range

7.25% – 9.75%
State sales tax rate
6.00%
Mandatory local rate
1.25%
District rates
0.10% – 2%

Compliance difficulty

Overall Difficulty

Rate Change Frequency

Moderate

Tax authority

State

SST participation

Non-member

Sourcing rules

California sales tax basics

The California sales tax rate is currently 6.00%. However, California adds a mandatory local rate of 1.25% that increases the total state sales and use tax base to 7.25%. Depending on local municipalities, the total tax rate can be as high at 9.75%.

Food and prescription drugs are exempt from sales tax.

Amazon.com owns and operates a number of fulfillment centers in California. This physical presence, or nexus, creates a sales tax obligation for Amazon and many sellers participating in Amazon’s Seller Central and Fulfillment By Amazon (FBA) programs.

Most companies that do business in California are required to register with the state.


California compliance pitfalls

Destination or Origin Based Sales Tax? — Both

The state and the county portions of the tax are origin-based. “Special district taxes,” the local portion of the total rate, are destination based.

Tax Districts

A “district” is a local jurisdiction that, under enabling statutes in various codes, may impose sales and use taxes within its borders. Voter approved district taxes may be levied on a countywide basis and within incorporated city limits. A city district tax rate applies only to addresses within the incorporated city limits. More than one district tax may be in effect in a given location.

Qualified Purchasers

A “qualified purchaser” must be registered with the California State Board of Equalization and report and pay use tax owed if California sales tax wasn’t collected at the point of sale.