Guide to Sales Tax in California in 2025

Whether you’ve fully set up shop in California, or simply ship there once in a while, it’s important you know whether your business is liable to their sales taxes. In our 10+ years of experience helping online businesses comply with taxes, we’ve found that tax policies are confusing. So we translated all the information from CDTFA’s official sales tax law into language that’s easy to understand.

This guide will tell you everything you need to know, plus direct you to the right places for handling any sales tax responsibility you may have.

What’s taxable in California?

In California, most types of goods where a physical product is transferred are taxable. Below is an overview of products that are generally taxable in California. Some local cities or districts might have their own rules or exceptions, however. For example, check out the Los Angeles Sales Tax Guide for specific rules in LA. Or the San Francisco Sales Tax Guide for rules up in the Bay Area.

• Tangible personal property: These are physical items. California taxes most tangible products.
• Hot prepared food
• Clothing: While most clothing purchased in California is taxed at California’s normal state and local sales tax rates, there are some exemptions.

To be absolutely clear about which products are subject to sales tax, and which are exempt, check the California Department of Tax and Fee Administration website.

What are non-taxable items in California?

California has a significant number of sales tax exemptions – and many of the state’s sales tax exemptions are unique or rare. Here are a few examples of non-taxable items that you don’t need to charge CA sales tax on:

• Software as a service (SaaS) is not taxable in California because there is no transfer of tangible personal property.
• Digital goods (same reasoning as SaaS)
• Most groceries
• Cold prepared food items (if taken to go)
• Candy
• Diapers
• Menstrual hygiene products
• Some magazines and periodicals
• Purchases with CalFresh benefits
• Prescription medication
• Medical devices
• Some services
• Gas, electricity, water or steam (if delivered through mains, lines, or pipes)

California also exempts certain types of organizations from California sales taxes like government agencies, museums, and some non-profits via exemption certificates.

What is the California food tax?

The California food tax is a sales tax exemption on most food and grocery item purchases. However, there are some kinds of food items that don’t qualify for the California food tax exemption like carbonated drinks and prepared foods.

• Examples of food that qualify for the California food tax exemption:
  • Produce
  • Meat, poultry, and fish
  • Dairy products
  • Breads and cereals
  • Other foods
  • Cold prepared food if taken to go
• Examples of food that doesn’t qualify for the California food tax exemption:
  • Prepared food sold hot
  • Cold prepared food if eaten in the restaurant
  • Carbonated drinks
  • Alcoholic beverages
  • Pet food
  • Vitamins, medicine, supplements
  • Cleaning products

What is California’s clothing sales tax?

California doesn’t currently have a lower or higher sales tax on clothing. However, while most clothing purchased in California is taxed at California’s normal state and local sales tax rates, there are some exemptions. Certain thrift stores are exempt from sales taxes in California (ex. Those operated by a qualifying nonprofit organization where the revenue is going to fund medical and social services to people with HIV or AIDS and military thrift stores located on a military base). Learn more about the California clothing sales tax and other California sales tax exemptions.

Do you have sales tax nexus in California?

The word “nexus” refers to a commercial connection in the state. Nexus determines the following questions for a state tax agency: Do you do business here, what kind, and how much? And when you do have nexus, that means you’re obligated to collect tax on your sales there. So the first question for you to answer is whether you have nexus in California.

California physical nexus

California economic nexus

• A significant amount of sales in California within twelve months. This is called an economic nexus, a sales tax nexus determined by economic activity, i.e. – the amount of sales you make in a particular state, not including sales through a marketplace.
• The threshold in California is $500,000 in annual sales.

To learn more about how this works, check out the Ultimate Guide to US Economic Nexus.

Sales tax rates in California

Tax rates can vary based on the location of your business and the location of your customer, plus the levels of sales tax that apply in those specific locations.

The base California state sales tax is 7.25%. There are additional levels of sales tax at local jurisdictions, too, which are added on top. Some areas charge more than district tax, and sales tax rates can even vary within a city.

Here are some examples of the tax being charged in different locations:

• Alameda sales tax: 10.75%
• Anaheim sales tax: 7.75%
• San Francisco sales tax: 8.625%

Here are some examples of sales tax rates within the city of Los Angeles:

• Carson sales tax: 10.25%
• Cerritos: 9.5%
• Downey: 10%

Here are some examples from San Diego:

• Oceanside: 8.25%
• Escondido: 7.75%
• Solana Beach: 8.75%

Check out Quaderno's Sales Tax Calculator to see your product's tax rate, amount, and final price in California.

How to calculate sales tax in California

California has a destination-based sales tax system, so you have to pay attention to the varying tax rates across the state. Charge the tax rate of the buyer’s address, as that’s the destination of your product or service. Add it to the price of your product, and collect the full payment.

How does California sales tax work with marketplaces?

Marketplaces in California are required to collect, report, and pay the tax on sales via their marketplaces. Marketplace sellers are, therefore, not required to pay taxes on what they sell through a marketplace. Here are some special rules that apply to marketplaces in California:

• Taxable and nontaxable sales are counted towards a marketplace facilitator’s economic nexus.
• Marketplace sellers must count the sales made through marketplaces towards their economic nexus even if they don’t have to pay taxes on those sales.
• Marketplace sellers are not required to register for economic nexus if all their sales are made via a marketplace.

See California’s marketplace sellers and facilitators’ guide for more information.

Sales tax on shipping charges in California

California doesn’t apply sales tax to any shipping costs, as long as the shipping costs are clearly listed and separated from the price of the item(s) you’re selling. Be sure to always mark the cost of the product and the cost of the shipping on two different lines of the bill.

How to register for a California sales tax permit

Remote sellers register for sales tax in California according to where you are based. US businesses can register via Online Services, an online tax portal. The system is available in English and Spanish. (This portal is also where you’ll file and pay your tax returns. For information on how to file, check out this California sales tax filing guide.)

Start on the Online Services website and select “Register a New Business Activity.”

Be prepared to share the following information:

• Your social security number or visa number
• Your date of birth
• Your driver license number, state ID number, or other ID (e.g., passport, military ID)
• Names and location of banks where you have an account
• Names and addresses of suppliers
• Name and address of bookkeeper or accountant
• Name and address of personal references
• Expected average monthly sales and the amount of those sales which are taxable
• Your email address
• If you’ve purchased an existing business, you must also provide the previous permit information

After your application is reviewed and approved, you should receive a seller’s permit and registration certificate. You’ll also receive a security code in the mail that will enable you to create an online tax account.

The website doesn’t state how long you should expect to wait, but if you have any questions, you can email the tax office for out-of-state sellers at [email protected].

Once registered, you’ll be assigned a tax filing frequency: monthly, quarterly, or yearly.

Sales tax guides for other states

• Alabama Sales Tax Guide
• Alaska Sales Tax Guide
• Arizona Sales Tax Guide
• Arkansas Sales Tax Guide
• Colorado Sales Tax Guide
• Connecticut Sales Tax Guide
• Delaware Sales Tax Guide
• Florida Sales Tax Guide
• Georgia Sales Tax Guide
• Hawaii Sales Tax Guide
• Idaho Sales Tax Guide
• Illinois Sales Tax Guide
• Indiana Sales Tax Guide
• Iowa Sales Tax Guide
• Kansas Sales Tax Guide
• Kentucky Sales Tax Guide
• Louisiana Sales Tax Guide
• Maine Sales Tax Guide
• Maryland Sales Tax Guide
• Massachusetts Sales Tax Guide
• Michigan Sales Tax Guide
• Minnesota Sales Tax Guide
• Mississippi Sales Tax Guide
• Missouri Sales Tax Guide
• Montana Sales Tax Guide
• Nebraska Sales Tax Guide
• Nevada Sales Tax Guide
• New Hampshire Sales Tax Guide
• New Jersey Sales Tax Guide
• New Mexico Sales Tax Guide
• New York Sales Tax Guide
• North Carolina Sales Tax Guide
• North Dakota Sales Tax Guide
• Ohio Sales Tax Guide
• Oklahoma Sales Tax Guide
• Oregon Sales Tax Guide
• Pennsylvania Sales Tax Guide
• Rhode Island Sales Tax Guide
• South Carolina Sales Tax Guide
• South Dakota Sales Tax Guide
• Tennessee Sales Tax Guide
• Texas Sales Tax Guide
• Utah Sales Tax Guide
• Vermont Sales Tax Guide
• Virginia Sales Tax Guide
• Washington Sales Tax Guide
• Washington, D.C. Sales Tax Guide
• West Virginia Sales Tax Guide
• Wisconsin Sales Tax Guide
• Wyoming Sales Tax Guide