In the state of California, the state sales tax rate is 7.25%. This rate is made up of a base rate of 6% in addition to a mandatory local rate of 1.25% that goes directly to California city and county tax officials. Depending on local sales tax jurisdictions, the total tax rate can be as high as 10.25%.
Additionally, food and prescription drugs are exempt from sales tax. Businesses with nexus in California are also required to register with the California Department of Tax and Fee Administration (CDTFA), and to charge, collect, and remit the appropriate tax.
In other words, a business has nexus in California when it maintains a physical presence in the state. This includes a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. Speaking to this, out-of-state sellers can also establish nexus.
California State Sales Tax Rate
- Base State Sales Tax Rate: 0%
- Mandatory Local Rate: 25%
- Local Rate Range: 15%–3%
- Total Rate Range: 25%–10.25%