The California (CA) state sales tax rate is currently 6.5%. However, California adds a mandatory local rate of 1% that increases the total state sales and use tax base to 7.5%. Depending on local municipalities, the total tax rate can be as high at 10.0%.
State and local taxes can reach 9.25% in many cities. 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.
How to Register
For sales and use tax purposes, companies must register for either a sales and use tax permit or a seller’s permit depending on the whether activity is retail related or the company functions as a reseller.
Registration is through the California Board of Equalization. To register your business and acquire a sales and use tax permit or a seller’s permits, you can either apply online or go to a local Board of Equalization office.
How to File and Pay
Most retail sales of tangible personal property (such furniture, giftware, toys, or clothing) are subject to sales tax in California.
The BOE assigns a filing frequency (quarterly prepay, quarterly, monthly, fiscal yearly, yearly) based on your reported sales tax or your anticipated taxable sales at the time of registration. Find your filing frequency below for your due dates.
Avalara Sales and Use Tax Products for California
AvaTax – AvaTax is a powerful, online sales tax compliance solution that provides all businesses with a level of sales tax automation that until now has been available only to Fortune 500 companies. AvaTax’s transaction-based service model and seamless integration into business applications gives you rapid access to all jurisdiction assignments and real-time sales tax calculations. Cutting-edge technologies and superior processing logic can manage even the most complicated tax issues, such as situs, nexus, tax tiers, tax holidays, exemptions, certificate management and product taxability rules.
TrustFile - Avalara TrustFile provides detailed sales tax reporting for online sellers. Allowing businesses to know exactly where, when and how much to file. Ecommerce business owners can use TrustFile to determine whether or not they are collecting the right amount of sales tax in each individual state, and then store a record of their sales tax history securely in the cloud for free.