California sales tax is a tax added to most purchases at the point of sale
When you buy something in California, the seller adds a tax to your bill. That tax goes to the state and to your local government. The rate you pay depends on where you are in California — it is not the same everywhere. The state sets a base rate, and then cities and counties add their own local taxes on top of it.
You do not pay sales tax on everything. Groceries, prescription medications, and some medical equipment are exempt. You also do not pay it on services like haircuts or car repairs, though there are exceptions. The tax applies mainly to tangible goods — things you can touch and take home.
The seller collects the tax from you and sends it to the California Department of Tax and Fee Administration. That agency then distributes the money to the state and local governments. You see the tax on your receipt, added to the subtotal before you pay.
Key Takeaways
- California's base sales tax rate is 7.25 percent, but your actual rate is higher because your city or county adds local taxes on top.
- Sales tax rates vary by location within California, ranging from 7.25 percent to over 10 percent depending on where you shop.
- Groceries and prescription medications are not subject to sales tax, but prepared foods and over-the-counter drugs are.
- The seller collects the tax at checkout and sends it to the state and local governments, not to a federal agency.
How the rate is calculated in your area
The California state sales tax rate is 7.25 percent. On top of that, your county adds a tax, and your city may add another one. Some special districts — like transit authorities or school districts — can add their own tax as well. All of these stack together to create your total rate.
A purchase in Los Angeles, for example, is taxed at a different rate than the same purchase in San Francisco or San Diego. Even within a county, rates can differ between cities. You can find your exact rate by entering your address on the California Department of Tax and Fee Administration website, or by asking the cashier at checkout.
The rate you pay is the one in effect where the seller is located, not where you live. If you buy something online from a California seller, you pay the tax rate of the seller's location. If you buy from out of state, the rules are different — see the section below on online purchases.
What is and is not taxed
Sales tax does not apply to groceries — fresh fruits, vegetables, meat, dairy, and bread are all exempt. Prescription medications are also exempt. Medical devices prescribed by a doctor, like diabetic testing supplies or hearing aids, are generally not taxed.
Over-the-counter drugs and vitamins are taxed, even though they are health-related. Prepared foods — anything hot, or anything sold ready to eat — are taxed. A sandwich from a deli counter is taxed; a loaf of bread from the shelf is not. Alcohol and tobacco are taxed at the regular rate, plus additional excise taxes in some cases.
Services are usually not taxed. A haircut, a car repair, a dental cleaning — these are not subject to sales tax. However, if you buy a physical product as part of that service, the product portion may be taxed. Labor is not; materials sometimes are, depending on the type of work.
Sales tax on online and out-of-state purchases
If you buy from an online seller based in California, you pay California sales tax at the seller's location rate. If you buy from an out-of-state seller, the rule depends on whether that seller has a physical presence or significant sales activity in California. Most large online retailers now collect California sales tax on all orders shipped to California addresses, even if they are based elsewhere.
If an out-of-state seller does not collect sales tax on your purchase, you may owe use tax instead. Use tax is a tax on goods you bring into California or have delivered to you. Most people do not pay it voluntarily, but it is technically owed. The state does not actively pursue individual consumers for use tax on small purchases, but the obligation exists.
When you order something online, check your receipt to see whether sales tax was added. If it was not, and the seller is based outside California, you can assume use tax applies — though enforcement is rare for individual purchases.
Who collects the tax and where it goes
The seller — the store, the online retailer, the gas station — collects sales tax from you at the point of sale. They hold that money and send it to the California Department of Tax and Fee Administration on a regular schedule, usually monthly or quarterly depending on the seller's size and sales volume.
The state then distributes the money. The base 7.25 percent goes partly to the state general fund and partly to local governments. The local taxes — the portion above 7.25 percent — go to the city, county, or special district that imposed them. A city might use its share for schools, roads, or public safety. A county might use it for health services or transit.
Sellers are required to register with the state before they can collect sales tax. They receive a permit and must file returns showing how much tax they collected. If a seller does not register or does not send in the tax they collected, the state can pursue them for back taxes and penalties.
Sales tax on specific items and situations
Clothing and shoes are taxed in California, with no exemption for children's clothing or any other category. Tools and equipment are taxed. Cars and motorcycles are taxed, though the tax is calculated on the purchase price and collected at the time of sale or registration.
Gifts are taxed the same way as any other purchase — the tax applies to the item, not to the fact that it is a gift. Resold items are taxed if you buy them from a retailer; if you buy from an individual, sales tax does not apply (though the individual may owe income tax on the sale).
Rental items — cars, equipment, tools — are sometimes subject to a rental tax instead of sales tax, or in addition to it. The rate and rules vary. Always ask the rental company whether tax is included in the quoted price or added at checkout.
How to find your local sales tax rate
The easiest way to find your rate is to visit the California Department of Tax and Fee Administration website and use their sales tax rate lookup tool. Enter your address or zip code, and it will show you the exact rate for your location. You can also call the department or visit a local tax office.
Your receipt will also show the tax rate applied to your purchase. If you want to verify the rate is correct, you can compare it to the official rate for that location. Rates change occasionally when local measures pass or expire, so the rate you paid last year may not be the rate today.
Many retailers display their local sales tax rate at the register or on their website. Some point-of-sale systems show the rate on the receipt. If you are unsure whether a rate is correct, the state website is the authoritative source.
Frequently Asked Questions
Do I pay sales tax on groceries?
No. Fresh produce, meat, dairy, bread, and other unprepared foods are exempt from sales tax in California. Prepared foods — anything sold hot or ready to eat — are taxed. Alcohol and tobacco are also taxed, even though they are sold in grocery stores.
Why is my sales tax rate different from the state rate?
California's base state rate is 7.25 percent, but your city and county add local taxes on top. These local taxes fund schools, transit, public safety, and other services. The total rate you pay depends on where you live and shop, and it can range from 7.25 percent to over 10 percent.
Do I owe sales tax on items I buy online from out of state?
If the seller collects California sales tax, you pay it at checkout. If they do not, you technically owe use tax on the item. Use tax is a tax on goods brought into California. Most people do not pay it on small purchases, and the state does not actively pursue individual consumers, but the obligation exists.
Are prescription medications taxed?
No. Prescription medications are exempt from sales tax. Over-the-counter drugs, vitamins, and supplements are taxed at the regular rate. Medical devices prescribed by a doctor are generally exempt, but devices sold over the counter are taxed.
What happens if a seller does not collect sales tax?
Sellers are required to register with the state and collect sales tax on taxable items. If a seller does not register or does not send in the tax they collected, the California Department of Tax and Fee Administration can pursue them for back taxes, penalties, and interest. You are not responsible for the seller's failure to collect or remit the tax.