California has the highest statewide sales tax rate in the nation at 7.25% — but in many cities, county and local district taxes push the combined rate well above 10%. Whether you are a consumer making a major purchase, a small business owner, or an out-of-state seller trying to understand your California nexus obligations, this guide covers everything you need for 2026. If you are just learning the basics, first read our primer on what sales tax is and how the layered US system works.
California’s 7.25% Statewide Base Rate
The 7.25% base rate breaks down as: 6.00% state general fund, 0.25% local revenue fund, 0.50% public safety fund, and 0.50% county transportation. This is the mandatory floor — no city or county can charge less. Compare this to Texas, which has a 6.25% base rate, or Florida’s 6% base. To calculate your actual tax, you need to add the local district taxes on top of this base.
County & City Combined Rates for 2026
Los Angeles County has a base combined rate of 10.25% in most areas, reaching 10.50% in some cities. San Francisco sits at 8.625%. San Diego County is generally 7.75%. Oakland and most of Alameda County are at 10.25%. San Jose and Santa Clara County are 9.375%. These rates can even vary by zip code within the same city because of overlapping district tax boundaries — which is why using our calculator is more reliable than guessing.
What Is Taxable in California?
California taxes retail sales of tangible personal property by default. Key exemptions include most unprepared groceries (food for home consumption), prescription medications, and certain medical devices. Prepared restaurant food is taxable. California digital goods rules are complex — downloaded software, streaming services, and e-books occupy a gray area with specific rulings. Compare this to New York, which taxes a broader range of digital services and professional services.
California’s Use Tax
If you purchase goods from out-of-state retailers and bring them into California for use, California use tax applies at the same rate as sales tax. This is a particularly significant issue for California businesses that purchase equipment or inventory online from sellers who do not charge California tax. Not self-reporting use tax is one of the most common and costly sales tax mistakes California businesses make.
Business Registration & Filing in California
Businesses making taxable sales in California must register with the California Department of Tax and Fee Administration (CDTFA). Once registered, you collect the combined rate and file returns monthly, quarterly, or annually based on your sales volume. Non-compliance penalties are significant. Before registering, make sure you actually have California nexus — physical presence or exceeding $500,000 in California sales for remote sellers (California’s threshold is higher than most states). After filing, remember that California sales tax payments may be partially deductible — see our sales tax deduction guide for details.
How California Compares to Other States
No other state’s base rate exceeds California’s 7.25%. Texas at 8.25% combined actually has a higher combined cap, but California’s uncapped local additions mean some areas exceed Texas’s maximum. New York City at 8.875% is also lower than California’s highest combined rates. For the most favorable environment for retailers, consider our analysis of the states with no sales tax at all.