California Sales Tax: Filing, Use Tax, Rates, Nexus, & More

Physical Nexus

Your business has physical nexus if it has any of the following items within the state of California:

Physical offices or storefronts
Employees reside in the state
Affiliates who refer business either directly or indirectly to the retailer of tangible products
Tradeshow presence

Here is a more extensive list of what the state of California considers instances of creating sales tax nexus.

Taxability

Taxability can change from state to state and often depends on how your product/services are defined.

Determine whether software and SaaS are subject to taxation here. Visit California's page on State Sales and Use Tax laws for further details.

Like much of sales tax, this can often be difficult to manage alone. Reach out if you need help understanding the taxability of your products/services.

California Sales Tax Rates

Sales tax collection in California is more complex than collecting in other states. While other states are typically destination or origin-based, California incorporates both sales tax collection methods which effectively leaves you collecting two different sales tax rates.

The statewide tax rate is 7.25%, but in most areas, local jurisdictions have district taxes that must be added to this.

When Are Sales Taxes Due in California?

Sales tax returns are dependent upon the state's due dates and the vendor's filing frequency. If the seller exceeds the economic threshold, they are liable to file on a monthly basis. If the seller does not exceed the threshold, then returns could be due quarterly or annually.

Monthly returns are due by the last day of the month for the previous month. Annual returns are due by January 31st.