California Sales Tax Basics

California sales tax is a tax added to the price of most goods you buy in the state. When you purchase something at a store, online, or from a restaurant, a percentage is added to your bill at checkout. The state collects this tax and distributes it to state and local governments.

The total sales tax rate you pay depends on where you are in California. The state sets a base rate, but cities and counties add their own local taxes on top of it. This means the rate varies by location — a purchase in Los Angeles will have a different total tax than the same purchase in San Francisco or a rural county.

Sales tax applies to most physical goods, but not to all purchases. Groceries, prescription medications, and certain medical equipment are typically exempt. Services like haircuts, plumbing, or consulting usually are not taxed, though there are exceptions depending on how the service is structured.

Key Takeaways

  • California's base sales tax rate is 7.25 percent, but your actual rate is higher because cities and counties add local taxes on top of it.
  • The total rate you pay ranges from about 7.25 percent to over 10 percent depending on which city and county you are in.
  • Most physical goods are taxed, but groceries, prescription drugs, and some medical items are exempt.
  • Online purchases from out-of-state sellers are subject to California sales tax if the seller has a physical presence in the state or meets certain sales thresholds.
  • Restaurants and prepared food are taxed, but unprepared groceries you cook at home are not.

State and Local Tax Rates

California's base state sales tax rate is 7.25 percent. However, this is only the starting point. On top of the state rate, counties add their own tax (ranging from 0.25 percent to 1.25 percent), and cities or special districts may add additional taxes. The combination of all these layers creates your local rate.

For example, Los Angeles County has a base county rate of 0.5 percent, but the city of Los Angeles adds another 2 percent, bringing the total to 9.5 percent. In contrast, some rural areas may have a total rate closer to 7.5 percent. You can find your exact local rate by entering your zip code on the California Department of Tax and Fee Administration website, or by asking a cashier at a local store.

These rates change occasionally when cities or counties vote to adjust their local taxes. Some areas have temporary increases that expire after a set number of years. If you move to a different part of California or shop in a neighboring city, the rate you pay may be different.

What Is and Isn't Taxed

Groceries — unprepared food you buy at a supermarket and cook at home — are not subject to sales tax in California. This includes bread, milk, vegetables, meat, and canned goods. However, prepared or ready-to-eat food is taxed. If you buy a rotisserie chicken, a sandwich from a deli counter, or food from a restaurant, you pay sales tax.

Prescription medications are exempt from sales tax when you present a valid prescription. Over-the-counter medications like pain relievers or cold medicine are taxed as regular goods. Medical devices prescribed by a doctor — such as diabetic testing supplies, hearing aids, or mobility aids — may be exempt, though the rules depend on the specific item and how it is classified.

Clothing and shoes are taxed in California, with no exemption for children's clothing or any other category. Gasoline is taxed, though the tax is included in the pump price you see. Services like haircuts, repairs, or professional consultations are generally not taxed, but labor charges bundled with the sale of goods sometimes are.

Items purchased for resale by a business — such as inventory a retailer buys to stock shelves — are not taxed if the seller provides a valid resale certificate. This prevents double taxation of the same goods.

Online and Out-of-State Purchases

If you order something online from a California seller, sales tax is added at checkout based on your delivery address. The seller collects the tax and sends it to the state.

If you order from an out-of-state seller, the rules depend on whether that seller has nexus in California — meaning a physical presence like a warehouse, office, or employees in the state. Large online retailers like Amazon meet this threshold and collect California sales tax on orders shipped to California addresses. Smaller sellers without a California presence may not collect the tax at the time of purchase.

If an out-of-state seller does not collect California sales tax, you are technically responsible for paying use tax — a tax on goods you bring into or purchase for use in California. In practice, most individual buyers do not report this on their personal taxes, though it is legally owed. Businesses are more likely to track and report use tax on their tax returns.

Who Collects and Where the Money Goes

Retailers and online sellers are responsible for collecting sales tax from customers and sending it to the California Department of Tax and Fee Administration. The state then distributes the revenue to counties, cities, and special districts based on formulas set by law.

The money funds local services including schools, public safety, infrastructure, and social programs. When a city or county votes to increase its local sales tax rate, the measure usually specifies how the new revenue will be spent — for example, a half-cent increase might be dedicated to transportation or homelessness services.

Businesses file sales tax returns monthly, quarterly, or annually depending on their sales volume. Large retailers file monthly; smaller businesses may file quarterly or annually. The state audits some returns to may support accuracy and compliance.

Special Situations and Exemptions

Senior citizens and disabled persons do not receive a blanket sales tax exemption, but they may be exempt from sales tax on certain medical equipment or mobility aids if those items meet specific criteria. You would need to provide documentation of the disability or age along with a prescription or medical order.

Nonprofit organizations can purchase goods without paying sales tax if they hold a valid resale certificate or nonprofit exemption certificate. Schools, charities, and religious organizations typically may have access to, but they must register with the state and provide proof of their status.

Native American tribes have special tax status on purchases made on tribal land. The rules are complex and vary by tribe and transaction type, so tribal members should contact their tribal tax office for specifics.

Motor vehicles are subject to sales tax, but the tax is collected by the Department of Motor Vehicles when you register the vehicle, not at the dealership. The rate is based on the vehicle's purchase price and your county of residence.

How to Find Your Local Rate and Understand Your Receipt

Your receipt shows the subtotal, the sales tax amount, and the total. To find out what rate was applied, divide the tax amount by the subtotal and multiply by 100. For example, if your subtotal is $100 and the tax is $9.50, your rate is 9.5 percent.

To look up the official rate for a specific address, visit the California Department of Tax and Fee Administration website and use their sales tax rate lookup tool. Enter your zip code or street address, and the tool will show you the combined state and local rate for that location. This is useful if you are moving, opening a business, or want to verify the rate you were charged.

If you believe you were charged the wrong rate, check your receipt against the official rate for your location. If there is a discrepancy, you can contact the store or report it to your local tax assessor's office. Overcharges are usually refunded if you bring them to the retailer's attention.

Frequently Asked Questions

Why does my sales tax rate differ from the city next to mine?

Each city and county sets its own local tax rate on top of California's 7.25 percent state rate. A city one mile away may have a different combination of city and county taxes, resulting in a different total. Rates can range from 7.25 percent to over 10 percent depending on local voter-approved measures.

Do I pay sales tax on groceries?

Unprepared groceries like produce, meat, bread, and canned goods are not taxed. Prepared or ready-to-eat food — including deli items, restaurant meals, and hot food from a grocery store — is taxed. The distinction is whether the food is ready to eat or requires preparation at home.

Do I have to pay sales tax on online orders from out-of-state companies?

Large online retailers with a physical presence in California collect and remit sales tax. Smaller sellers without California nexus may not collect it at checkout, though you are technically responsible for use tax. In practice, individual buyers rarely report this on personal tax returns.

Can I get a refund if I was overcharged sales tax?

Yes. If you were charged a rate higher than your location's official rate, contact the store with your receipt. Most retailers will refund the difference. You can also verify the correct rate using the California Department of Tax and Fee Administration's lookup tool.

Are prescription medications taxed?

Prescription medications are exempt from sales tax when you present a valid prescription to the pharmacist. Over-the-counter medications like aspirin or cough syrup are taxed as regular goods. Some medical devices and supplies may also be exempt if prescribed by a doctor, but rules vary by item.