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California Sales Tax Guide (2025): Rates, Filing Tips, and What to Know as a Business Owner

Updated: Aug 26

Sales Tax Guide

If you run a business in California, you’re probably aware that sales tax is one of the most confusing and frequently changing obligations. From base rates to local add-ons, and monthly filing requirements to penalties for missing deadlines, it can be overwhelming. This 2025 guide breaks down exactly what you need to know to stay compliant and avoid costly mistakes.


Thinking of moving? Use our state tax calculator to calculate how much money you'll save!


1. California Sales Tax Rate in 2025

The statewide base sales tax rate in California is 7.25%. However, local jurisdictions (cities, counties, and districts) often add their own taxes on top. As a result, the combined rate can be as high as 10.25% in some areas.


For example:

  • Encinitas: 7.75%

  • Los Angeles: 9.5%

  • Oakland: 10.25%


To check the exact rate for your business location, use the CDTFA's online lookup tool or use our embedded tool on the right.


2. Who Needs to Collect Sales Tax in California?

You are required to collect sales tax if:

  • You sell physical goods or taxable services in California

  • You operate a brick-and-mortar or online business with nexus in the state

  • You sell through platforms like Shopify, Square, Amazon, or Etsy and meet economic nexus thresholds


Nexus typically exists if:

  • You have a physical presence (office, store, warehouse)

  • You exceed $500,000 in sales to California customers in the current or previous calendar year


3. How to Register for Sales Tax in California

To collect sales tax, you must first obtain a Seller’s Permit from the California Department of Tax and Fee Administration (CDTFA). Registration is free and can be completed online at cdtfa.ca.gov.


You’ll receive a permit number, filing frequency, and a requirement to post the permit in a visible location if you operate a storefront.


4. How Often Do You Need to File?

The CDTFA assigns a filing frequency based on your reported sales:

  • Monthly: If your average monthly sales tax liability is over $600

  • Quarterly: For moderate activity

  • Annually: For very low-volume businesses


Filing deadlines typically fall on the last day of the month following your reporting period.


Example:

  • Q1 (Jan–Mar) return is due April 30


Late filings can trigger:

  • A 10 percent penalty

  • Monthly interest on unpaid balances


The sooner you file, the more you limit potential penalties. If you’re behind, consider filing immediately and requesting relief if there was a valid reason for delay.


5. How to File and Pay Sales Tax in California

You must file online via the CDTFA portal. Here's the basic process:

  1. Log in to your CDTFA account

  2. Choose your account (Sales and Use Tax)

  3. Enter your total sales, taxable sales, and purchases

  4. File your return

  5. Submit payment via ACH or credit card


It's crucial to reconcile your POS, Z-tapes, or e-commerce reports against what you report. The CDTFA audits inconsistencies, and mismatched data can result in penalties.


6. What About Online Sellers and Marketplace Facilitators?

If you sell on platforms like Amazon or Etsy, the platform may be required to collect and remit tax on your behalf. However, if you also sell through your own website, you are responsible for collecting and remitting on those sales.

You may still need to register and file even if the platform handles part of your tax collection.


7. How We Help at Cardiff Tax Pros

We work with California business owners, including:

  • Retailers

  • Online sellers

  • Liquor and smoke shops

  • Contractors and service providers


We:

  • Register you with CDTFA

  • Help you track and reconcile sales

  • File your sales tax returns accurately and on time

  • Catch up on past-due filings and help reduce penalties


If you're overwhelmed or unsure whether you're doing it right, we can take it off your plate.


8. Ready to Get Sales Tax Off Your Mind?

Sales tax compliance doesn’t have to be stressful. Whether you're a new seller, an overwhelmed shop owner, or behind on filings, we can help you get back on track.


Schedule a free consultation today and let’s make sure you’re covered.


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