California sales tax varies by location. There is a state sales tax as well as by local district taxes (counties and cities). Multiple district taxes can apply. California has a statewide sales tax rate of 7.25% PLUS some counties have voter- or local government-approved district taxes – also called special tax districts.
California (CA) Sales Tax Rate: 7.25%
Maximum rate for local municipalities: 9.75%
Any business with a physical location in California has nexus, and is therefore required to register to collect sales tax, and to file sales tax returns and pay sales tax to the state.
Other activities that create nexus include someone working for you who lives in the state, having California affiliates who advertise your products in exhange for commission when a sale is made from their affiliate link/marketing activities, or attending a tradeshow and making one or more sales at that show.
Retailers who sell on Amazon and use their Fulfillment by Amazon (FBA) program, will have a physical presence in California if any of their products are stored within a California FBA warehouse.
Sales tax applies to most goods (tangible personal property) purchased by consumers. Unprepared food is not taxable, nor are some medical devices, prescription medications, or sales to the US Government.
Other taxable points to consider include:
Retailers must obtain a California seller’s permit if they are doing business in California. Out-of-state retailers with at least $100,000 in gross receipts from all locations (both within California and from other states or internationally) within a calendar year, must registered for a use tax account and collect/remit use tax on behalf of customers. THe use tax rate is the same as the sales tax rate.
Filing can be done online or via mail. You can use BOE’s free online filing option or you can choose to use a third-party service to file with any provider that has successfully complete the BOE acceptance testing and is authorized to receive returns and payment information. If filing online, you may pay through Electronic Funds Transfer program (EFT), ACH Debit, ACH Credit through your own financial institution or make your payment separately.
The EFT payment program is mandatory if you have a California Seller’s Permit and average $10,000 in monthly payment or more, or you have a Special Taxes and Fees account and average monthly tax or fee payments of $20,000 or more. Other sellers can select this as a voluntary option.
Finally, there is a prepayment sales tax rate for motor vehicle fuel, diesel fuel and aircraft jet fuel.
When you firt received your sales tax permit from the state of California, you were assigned a payment schedule. This schedule is either monthly, quarterly, or annually.
The following due dates apply to California sales tax returns. The due date is noted for each period for monthly, quarterly, and annual reporters. If a due date falls on a Saturday, Sunday, or legal holiday, then the return is due the following business day.
Monthly: Due the last day of the month following the reporting period month.
|January||February 28 (or Feb. 29 in a leap year)|
Quarterly: April 30th, July 31st, October 31st and January 31st for prior quarter. (Prepayment returns are due on the 24th of the prior two months.)
|January – March (Q1)||April 30|
|April – June (Q2)||July 31|
|July – September (Q3)||October 31|
|October – December (Q4)||January 31|
For Sales Tax Accounts: Due January 31st for prior year.
For Qualified Purchasers and Consumer Use Tax Accounts: April 15th.
Prepayment accounts file on the 24th of the first 2 months of each quarter.
|January – December||January 31|
There is no electronic method currently available to amend an online return. You must print the return and write the correct figures on the “Confirm Filing” page of the return filed online, then write “Amended Return” across the top. Submit via mail with any additional payment due or file a claim for refund or credit if you have overpaid. Mail documents to:
Board of Equalization, MIC 35
PO Box 942879
Sacramento, CA 94279-0035
Beginning the day after a sales tax return is due, penalties and interest will begin to accrue. These include:
For more details, see Publication 75 on the Board of Equalization website.
California collects sales tax for delivery with special tax districts and “engaged in business” locations. Generally, your customer is liable for the district use tax and you may collect it from them as a courtesy. Learn more details at District Taxes and Delivered Sales web page.
To accurately calculate and collect California sales tax on your website or other application, use our TaxTools product. It scrubs California addresses and finds the right sales tax rate for all orders shipping within the state of California, regardless of destination or product class. Configuring sales tax on your ecommerce store has never been easier. Contact us for more information or register for a free trial of the TaxTools software.
You can also use our free sales tax calculator to look up the rate for any California address.