CA States

California State Sales Tax 2016: What You Need to Know

by Jennifer Dunn

California Sales Tax

For an update to this post, check out our California State Sales Tax 2018 blog post.

Many TaxJar customers deal with the great state of California. Either you live there – it is the most populous state in the U.S. after all – or you have nexus there for another reason. Maybe California is your base of West Coast operations, or you have inventory in one of California’s many Amazon fulfillment centers.

The Basics of California State Sales Tax

California sales tax rate: The California sales tax rate is 7.5%. This rate is made up of 6.25% state sales tax rate and a 1.25% rate in each county.

California local sales tax rates:  Vary by district. Find the most up-to-date California sales tax rates here

How to collect sales tax in California: California is a modified-origin state, which makes figuring out just how much you are supposed to collect in sales tax a little (okay, a lot) confusing. Long story short, California requires that you collect from buyers the California state sales tax rate of 7.5% plus a district rate. You can find out more about collecting sales tax in California here.

Important Note for Amazon sellers: Amazon treats California as a destination-based state when it comes to sales tax collection. If you’re using TaxJar to report how much sales tax you collected in California, you’ll find that it’s easier to set California as a destination state in your TaxJar state settings.

How to File a Sales Tax Return in California: Just as collecting sales tax in California can be tricky, so is filing. Click here for a guide on how to file a sales tax return in California (the easy way!)

Or check out our handy video:

Got Nexus in California?

If you have sales tax nexus in California, ensure that you are signed up to collect sales tax. Click here for how to register for a California sales tax permit.

If you sell on FBA and you’re not sure whether you have sales tax nexus in California, check out these resources:

Or you can sign up for a 30-day free TaxJar trial and we’ll show you which Amazon fulfillment centers your items have shipped from.

What’s New in California Sales Tax for 2016?

Sales Tax Rate Changes: While some California sales tax rates changed on July 1, 2015, so far no sales tax rate changes have been announced for 2016. Of course, that’s always subject to change. Follow TaxJar on Twitter for the latest sales tax news and updates.

California preparing for legalized marijuana – Starting January 1, 2016 the California BOE has introduced a system to track commercial cannabis sales from legal dispensaries. This step paves the way for the BOE to also track excise taxes should the sale of commercial marijuana become legal in the state. Long story short – it sounds like the California BOE has seen the writing on the wall and is trying to get a jump on collecting marijuana revenue. Without a doubt they’re paying attention to Colorado and their marijuana excise tax windfall.

More California Resources:

California Sales Tax Guide for Business

California Board of Equalization Sales & Use Tax

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