California Sales Tax Guide for Businesses
Return Location: Online
Has Local Filings: Yes
Sales Tax Rate: 7.25% plus 1.25% local rate
Contact Information: Visit their website or call 1-800-400-7115 for their sales tax hotline. Press 1 for English, 7 for Main Menu, then 2 for Sales and Use Tax.
How is Tax Calculated?: The state, county, and city taxes are based on the origin of the sale, and the district taxes are based on the destination of the sale.
Are Services Taxable?: Generally no, but services are taxable if they are inseperable from the sale of tangible personal property, or if they involve manufacturing/fabrication. Read more here.
Nexus in California
What Creates Nexus: A business is considered to be “engaging in business in California” (and therefore owe sales tax) if they:
- Maintain, occupy, or use any building in the state
- Have representatives or delivery vehicles in the state
- Have employees or contractors in the state
- Make repairs or provide maintenance in the state
- Have affiliates (online or in-person) selling more than $10,000 of products over the past 12 months, and more than $1,000,000 in-state sales. Learn more here.
eCommerce Nexus?: There are no special laws that create nexus for online sellers in California. However the state does have affiliate/click-through nexus (see above).
How to FIle a Sales Tax Return in California
Online Only: California requires that you file a sales tax return using the Taxpayer Online Services Portal.
We will be adding an instructional video here at a later date.
How to Get a Sales Tax Permit
View our full guide: How to Register for a Sales Tax Permit in California Quickly
Where to Register: California Department of Taxation
Registration Fee: Free, but there may be a security deposit if your taxable sales are high enough.
Renewal Required?: No, California does not require you to renew your sales tax permit.
California Sales Tax Filing Frequency
California will assign your filing frequency when you register for a sales tax permit. That being said, you can use the following as a heuristic:
Quarterly Prepaid: For average monthly tax liabilities above $1,200.01 and above.
Quarterly: For average monthly tax liabilities between $101 to $1,200
Semi-Annual: For average monthly sales tax liabilities between $0 to $100
Annual: For average monthly sales tax liabilities between $0 to $100.
Discounts: There is no early filing discount in California.
Late Fees: Late sales tax will incur a 5% fee of the tax due, plus 0.5% for each month. The maximum penalty is 25% of the unpaid tax. Read more here.
California Sales Tax Return Due Dates
California’s sales tax returns are typically due at the end of the following month. Read more on California’s website.
Monthly Filing Frequency
January Collection — February 28
February Collections — March 31st
March Collections — April 30th
April Collections — May 31st
May Collections — June 30th
June Collections — July 31st
July Collections — August 31st
August Collections — September 30th
September Collections — October 30th
October Collections — November 30th
November Collections — December 31st
December Collections — January 31st (following year)
Quarterly Filing Frequency
Check California’s website if you are on a quarterly pre-pay program.
Q1: Jan - March Collections — April 30th
Q2: April - June Collections — July 31st
Q3: July - September Collections — October 31st
Q4: October - December Collections — January 31st
Annual Filing Frequency
January - December Collections — January 31st (following year)
California Sales Tax Holidays
California does not currently have any sales tax holidays.
Special Notes for Amazon Sellers
Amazon does have a warehouse here. Be sure to check to see if your FBA inventory is being stored in California, as it will create a sales tax obligation.
We can help you determine where Amazon is storing your inventory. Contact us to learn more.