California Sales Tax Demystified

California Sales Tax Demystified

California Sales Tax is actually surprisingly straight forward.

With that said there ARE a couple of things worth noting:
1) It is VERY common to lump Shipping & Handling onto the same line on an invoice.  And because Handling is taxable the State of California considers that line item to be taxable.  Here is a document on the state’s BOE website to reference
2) A new Battery Fee went into affect this year (2017)
3) There is an Agricultural Tax for farmers.  This replaces the State Tax Rate.  Any County and/or City taxes still apply.
4) The REAL trick in California is determining WHICH rate to use.  There are so many different combinations of City, County, and State tax rates can be used on any single invoice.  It is critical that you take your time and make sure to use the correct rates on each invoice.

 

Here I will list out what is taxable in California on each of the 3 types of sales:

  • Major Units:
    Price
    Freight
    Attached Accessories
    Installation charge for said Accessories
    Setup
    PDI
    Delivery Fee
    DOC Fee
  • Jobs/Service Tickets:
    Shop Materials
    Parts
  • Parts/Accessories/Apparel:
    Parts
    Shipping and Handling

The current Tire Disposal Fee for each new tire sold is  $1.75

The new Battery Fee is $1.00 per new battery sold.