California Sales Tax: Rates, Calculator, Who Pays – NerdWallet

California might have some of the highest sales tax rates in the country, and calculating how much is owed can come down to where the item is sold, what the item is and who it’s sold to.

In California, the statewide sales tax is 7.25%. However, the final price of any taxable purchase could be higher due to district taxes, which can be anywhere from .10% to 1.00%. It’s also possible to have more than one district tax applied to a purchase.

In California, sellers are responsible for calculating sales tax and paying the correct amount to the California Department of Tax and Fee Administration (CDTFA).

During a sale, if sales tax is not included in the price, sellers pass the California sales tax to their buyers by meeting three conditions:

• The sales agreement calls out the addition of sales tax reimbursement.

• The sales tax is listed separately on receipts and invoices.

• There’s a sign on the premises (or on price tags, advertising or other printed materials) stating that sales tax reimbursement will be added to prices of taxable products.

If the sales tax is included in the price, then a notice to the buyer needs to be visible that states either one of the following:

• “All prices of taxable items include sales tax reimbursement computed to the nearest cent.” 

• “The price of this item includes sales tax reimbursement computed to the nearest cent.”

Tangible personal property sold at retail is subject to California sales tax. This could include furniture, gifts, toys, antiques and clothing. Service and labor costs may also charge sales tax, particularly if they create physical items.

Some items exempt from sales tax include certain food products and prescription medicine.

No organizations, whether nonprofit, religious or exempt, have a blanket exemption from California sales and use taxes. Instead, it depends on the type of sale and organization.

In general, the types of sales and purchases that are exempt from sales tax include certain food products, prescription medicine, some vehicle and vessel transfers, as well as sales to the U.S. government.

California sales tax is collected by sellers, who then pay that amount to the CDTFA.

California does not have any sales tax holidays.

You may be able to deduct California sales tax from your federal tax return by taking the SALT deduction. This allows for the write-off of up to $10,000 of state or local taxes paid that year.

However, this strategy requires itemizing, which may be ideal for those who live in a state with a high sales tax and who purchase a large number of taxable goods and services throughout the year. Otherwise, itemizing might not result in the largest tax refund, so it can be helpful to seek professional tax advice if you’re considering deducting your California sales tax.