If your limited liability company (LLC) sells physical products or certain types of services, you will need to collect and pay sales tax. In California, the first step is visiting the California Department of Tax and Fee Administration’s website and registering for sales tax in order to acquire a seller’s permit, or sales tax permit.
What Products and Services Are Subject to Sales Tax in California?
The sale and rental of tangible property are subject to sales tax in California. Some labor services and associated costs are subject to sales tax if they are involved in the creation or manufacturing of new personal property. Groceries, prescription medication, and some medical devices are exempt from sales tax in California.
California Sales Tax Rate
California has the highest tax rate at 7.25%.
Five states have no sales tax. Colorado has the lowest sales tax at 2.9%.
How to Register for California Sales Tax
In California, acquire a seller’s permit by following the detailed instructions for registration:
- Visit the business online services website.
- Register for an account.
- Fill out the sales tax permit application.
- There is no fee to apply for a sales tax permit in California.
Use our Sales Tax Calculator to calculate taxes and total purchase amount.
In California, and across the country, collecting sales tax is a must if you want to avoid potentially heavy fines and even closure. It’s crucial that you follow your state’s laws, and you might consider consulting with an accountant or tax attorney to make sure you’re in full compliance.