Resources Law by State California Sales Tax Rate

California Sales Tax Rate

At 8.75%, California has the highest state sales tax, which can total up to 9.75% with local sales tax included. Sales and use taxes in the state of California are collected by a publicly elected tax commission. The statewide 8.25% is allocated as:

  • 8.75% - State
  • 5.00% - State - General Fund
  • 0.25% - State - Fiscal Recovery Fund
  • 0.50% - State - Local Revenue Fund
  • 0.50% - State - Local Public Safety Fund
  • 1.00% - Uniform Local Tax
  • 0.25% - Local County - Transportation funds
  • 0.75% - Local City/County - Operational funds

Starting April 1, 2009 and ending June 30, 2011 the state sales and use tax increased by 1% as a result of the 2008-2009 California budget crisis. The minimum sales tax statewide is 8.25%.

Supplementary sales tax may be added (with voter approval) by cities, counties, service authorities, and various special districts (such as the Bay Area Rapid Transit district). The effect is that sales tax rates vary from 8.75% (in areas where no additional taxes are charged) to 10.75% (for example, in the city of Avalon, on Santa Catalina Island, in National City, and in Alameda County). On October 1, 2008, the city of South Gate and Pico Rivera increased their sales-tax rate to 10.25%, the highest in California.
The last changes to the published local tax rates took effect on April 1, 2007. Official updates are published on the Board of Equalization website and also in Publication 71.

In general, sales tax is required on all purchases of tangible personal property to its ultimate consumer. Services are not subject to sales tax (but may be subject to other taxes).

Vehicle purchases are taxed based on the city and county in which the purchaser registers the vehicle, and not on the county in which the vehicle is purchased. There is therefore no advantage in purchasing a car in a cheaper county to save on sales tax (a one-percent difference in sales tax rate would otherwise result in an additional $300 loss on a $30,000 car).

In grocery stores, unprepared food items are not taxed but vitamins and all other items are. Ready-to-eat hot foods, whether sold by supermarkets or other vendors, are taxed. Restaurant bills are taxed. As an exception, hot beverages and bakery items are tax-exempt if and only if they are for take-out and are not sold with any other hot food. If consumed on the seller's premises, such items are taxed like restaurant meals. All other food is exempt from sales tax.

Also excluded are food animals (livestock), food plants and seeds, fertilizer used to grow food, prescription drugs and certain medical supplies, energy utilities, certain alternative energy devices and supplies, art for display by public agencies, and veterans' pins. There are many specific exemptions for various veterans', non-profit, educational, religious, and youth organizations. Sale of items to certain out-of-state or national entities (mostly transportation companies) is exempt, as are some goods sold while in transit through California to a foreign destination.
Occasional or one-time sales not part of a regular business are exempt, except that sales of three or more non-food animals (puppies, kittens, etc.) per year are taxed.

There are also exemptions for numerous specific products, from telephone lines and poles, to liquid petroleum gas for farm machinery, to coins, to public transit vehicles. There are partial exemptions for such varied items as racehorse breeding stock, teleproduction service equipment, farm machinery, and timber-harvesting equipment.For an organized list of exemptions, with estimates for how much revenue the state loses and the people saves for each, see Publication 61 of the Board of Equalization.

Sales tax is charged on gasoline. The tax is levied on both the gasoline and on the federal and state excise taxes, resulting in double taxation (triple if the money used to purchase the gas has already been subject to income tax, as would be the norm). The sales tax is included in the metered price at the pump. The California excise tax on gasoline is 18 cents a gallon.

Motor vehicle gasoline and jet fuel are subject to special taxation regimes. In 2005, there was a political dispute in the San Francisco Bay Area about whether revenues for jet fuel should be credited to San Mateo County (where San Francisco International Airport is physically located), the City and County of San Francisco, which owns the airport, or Alameda County, where Oakland International Airport is located. (The distinction is largely point of delivery vs. point of negotiation for the sale.) This is controlled by Regulation 1802, which has other provisions about businesses which have multiple locations.

Critics of the current sales tax regime charge that it gives local governments an incentive to promote commercial development (through zoning and other regulations) over residential development, including the use of eminent domain condemnation proceedings to transfer real estate to higher sales tax generating businesses. This is a result of Proposition 13 passed by California voters in the 1970s.

Thanks to Sales Tax Accountants our company was able to avoid an expensive audit and save tens of thousands
James Turner - Retail Supply Services

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