[1] However, retailers are allowed (but not obligated) to obtain reimbursement for their tax liability from the consumer at the time of sale.
[2] Whether a sales tax reimbursement amount is actually added is a matter of contract between the retailer and the consumer.
[3] Use tax is imposed on the storage, use, or other consumption in California of tangible personal property purchased from a retailer.
Additional taxes may be charged for bond repayment or special assessments, all of which must be voter approved (See Mello-Roos).
"[12] Supplementary local sales taxes may be added by cities, counties, service authorities, and various special districts.
[16][17] SB 566 legally authorized all California cities to levy additional local sales taxes.
Unrestricted general sales taxes are subject to majority vote approval by local voters.
Proposition 218 ("Right to Vote on Taxes Act") was a 1996 initiative constitutional amendment approved by California voters.
Proposition 218 includes a provision constitutionally reserving to local voters the right to use the initiative power to reduce or repeal any local tax, assessment, fee or charge, including provision for a significantly reduced petition signature requirement to qualify a measure on the ballot.
A local compensatory initiative under Proposition 218 is an alternative option when contract impairment problems are present.
It is the retailer's responsibility to collect the state sales tax on all purchases made within (or shipped to) California regardless where the retailer/supplier is located.
Businesses with multiple locations in the state may attribute all online sales taxes to a single jurisdiction, which had led to district-shopping for revenue-sharing deals with cities that return a portion of the collected sales tax to the business.
In 2019, SB 531 was approved by the legislature to close this loophole, but was vetoed by Governor Gavin Newsom.
In general, sales tax is required on all purchases of tangible personal property to its ultimate consumer.
Sale of items to certain out-of-state or national entities (mostly transportation companies) is exempt, as are some goods sold while in transit through California to a foreign destination.
[34] There are also exemptions for numerous specific products, from telephone lines and poles, to liquid petroleum gas for farm machinery, to coins, to public transit vehicles.
[35] For an organized list of exemptions, with estimates for how much revenue the state loses and the people saves for each, see Publication 61 of the Board of Equalization.
However, if the customer is provided a copy of the software on a physical storage medium such as a CD-ROM or a DVD, the entire transaction is generally subject to sales tax.
Critics of the current California sales tax system contend that it gives local governments an incentive to promote commercial development (through zoning and other regulations – otherwise known as "fiscalization of land use") over residential development, including the use of eminent domain condemnation proceedings to transfer real estate to higher sales tax generating businesses.
State Disability Insurance (SDI) Tax is 1.20 percent of the first $128,298 in wages, paid by the employee.