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California Sales Tax Guide for Businesses

Fast Facts


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.

Receive a complementary nexus study from our team.

You'll learn where you owe sales tax and what your historical liabilities are.

Receive a free nexus study to learn where you owe sales tax.