This blog was last updated on November 19, 2025
California imposes a statewide base sales tax rate of 7.25%, the highest minimum statewide rate in the U.S. This is the starting point for all California sales tax calculations.
What’s Taxable in California
Under California sales tax law, sales and use tax applies to most sales of tangible personal property. California sellers, including remote sellers, must collect and remit sales tax when selling taxable goods or services to California customers.
Examples of taxable items include:
- Clothing
- Non-prescription drugs
Businesses should always review updates to California sales tax rules.
Sales Tax Nexus in California
A seller is liable to collect and remit California sales tax if they meet the state’s nexus requirements. Nexus can be established through either physical or economic presence.
California: Physical Nexus
Physical presence can be created by maintaining inventory or office locations in California, having representatives in California for the purposes of taking orders, making sales or deliveries, installing or assembling tangible personal property, or leasing equipment in California.
California: Economic Nexus
California enforces economic nexus for remote sellers. You must register for California online sales tax collection if your business has over $500,000 in sales into California during the current or preceding calendar year.
Learn more here.
California Sales Tax Exemptions
Certain sales are exempt from California sales and use tax requirements. Understanding eligibility is essential before claiming a sales tax exemption in California.
Examples of Exempt Products and Services
- Most services, unless California statutes say otherwise
- Food and food ingredients
- Qualifying agricultural items
- Prescription drugs
- Digital goods (digital books, digital audio-visual works, digital audio)]
Entity or Use Based Exemptions
Additionally, California exempts sales to certain entities from the sales/use tax, including the following:
- Qualifying non-profit organizations
- Sales for resale
- Partial exemption for farming equipment and machinery
- Partial exemption for manufacturing and research and development
How to Claim Sales Tax Exemption in California
To claim an exemption, a purchaser must provide an exemption certificate to the seller at the time of sale. The seller keeps the certificate and may sell property or services without charging sales tax. California requires different exemption certificates for different types of exemption. To obtain the relevant form for a specific exemption, consult the CDTFA’s full list of certificates here.
California Filing and Remittance Requirements
California offers multiple methods for filing and remitting sales and use tax:
- E-filing through CDTFA Online Services.
- Paper filing using the CDTFA-401-A form.
Taxpayers with an average monthly sales and use tax liability of $17,000 or more in California are required to pay their taxes electronically on an accelerated schedule. More details can be found here.
Frequently Asked Questions
Is California part of the Streamlined Sales Tax (SST) initiative?
California is not part of the Streamlined Sales Tax (SST) initiative, a multi-state agreement designed to simplify and standardize sales tax rules. More information concerning SST may be found here.
Does California have sales tax holidays?
No, California does not currently have sales tax holidays.
Are there any special point of sale fees in California?
Point-of-sale fees are fixed amount or rate-based assessments levied on certain products or services at the time of sale and paid by the final consumer at retail. For example, California imposes the following point of sale fees:
- California Redemption Value (CRV) fees
- Carpet Fees – California Carpet Stewardship Information for Retailers and Dealers
- Electronic Waste Recycling Fee- CalRecycle: Electronic Waste Recycling Fee
- Mattress Fee – Mattress Recycling Fee for California and Connecticut Programs to Increase Jan. 1, 2025
- 911 and 988 Surcharges – Emergency Telephone Users Surcharge – 911 Surcharge and 988 Surcharge
- Tire Fees – Tax Guide for California Tire Fee
Does California apply sales tax to shipping charges?
Generally, California does not apply sales tax to shipping charges. California shipping charges are exempt as long as: (1) you ship directly to the purchaser by common carrier, contract carrier, or US Mail; (2) your invoice clearly lists delivery, shipping, freight, or postage as a separate charge; and (3) the charge is not greater than your actual cost for delivery to the customer.
For sourcing sales tax, is California origin or destination based?
California is a hybrid state. The state, county, and city taxes are based on the origin of the sale, and district taxes are based on the destination of the sale.
How do I register for a California sales tax permit?
Businesses or individuals selling tangible personal property or certain services to California consumers may need to register to collect sales tax when meeting qualifying requirements. Sales and use tax permit registrations must be completed online through CDTFA Online Services. More information may be found here.
Additional Resources
For more information on U.S. sales tax compliance across all 50 states, check out our:
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