California sales tax on invoices (2026 guide)

California has a 7.25% statewide sales tax rate, and most cities and counties add district taxes on top — between 0.10% and 2.00% in the areas that have them. So the rate on your invoice depends on where the sale happens, not just on the state.

If you're a freelancer or small business selling to California customers, this guide covers what to charge, what counts as taxable, and what a California invoice should show.

California sales tax rates

Part of the rate	Rate
Statewide base rate	7.25%
District taxes (where they apply)	0.10% – 2.00%

The statewide 7.25% already includes a local portion that every county receives. District taxes are extra, approved by local voters, and they change more often than the base rate — some cities have several stacked together.

How to find the right rate: use the CDTFA's rate lookup by address before you invoice a new customer, and check it again at the start of each quarter, when new district taxes usually take effect.

Is what you sell taxable in California?

California's sales tax applies to retail sales of tangible personal property — physical goods — unless a specific exemption applies.

• Physical products such as merchandise, printed materials, equipment and furniture are generally taxable.
• Pure services — consulting, coaching, writing delivered digitally, most professional services — are generally not taxable.
• Services that create a physical item can be taxable. The CDTFA explains that some service and labor charges are subject to tax if they result in the creation of tangible personal property. Producing prints, fabricating a sign or custom-making an object are typical examples.
• Delivery charges can be excluded from tax in some cases, but only if they're shown as a separate line on the invoice and meet CDTFA's conditions.

When an invoice mixes taxable goods and non-taxable services, list them on separate lines so tax is only charged on the taxable part. In Invoice Native, tick Tax on the taxable lines only; the tax is calculated on those lines.

Getting a seller's permit

If you make retail sales of taxable goods in California, you need a seller's permit from the California Department of Tax and Fee Administration. The permit is free, and you can apply online.

With the permit you:

1. collect sales tax from your customers (most retailers show it as a separate line),
2. file sales and use tax returns on the schedule the CDTFA assigns you, and
3. pay the tax you collected.

Even if you don't collect tax from a customer, you still owe the tax on a taxable sale — so it pays to get this right on the invoice.

What a California sales tax invoice should show

The CDTFA treats tax as reimbursed by the customer when you list the sales tax as a separate amount on the receipt or invoice. A clear invoice includes:

• your business name, address and seller's permit details,
• the customer's name and billing address,
• a unique invoice number, the invoice date and the due date,
• a description, quantity and price for each item,
• sales tax as its own line, with the rate you applied,
• separately stated delivery charges, if any, and
• the total due.

A clean layout also makes it easier to prove, later, which lines were taxable and which weren't.

Customers who don't pay sales tax

Businesses that buy goods to resell don't pay sales tax to you — they give you a resale certificate instead. California's standard form is CDTFA-230, General Resale Certificate. Accept it in good faith, keep it on file, and write the certificate details on your invoice.

Some sales are exempt for other reasons, such as certain sales to the U.S. government. Whatever the reason, the burden is on you to show why tax wasn't charged, so keep the paperwork. See how to invoice a tax-exempt customer.

Keeping records

Keep copies of your invoices, the rates you used, and every resale or exemption certificate. If the CDTFA audits you, these documents show that you charged the right rate for the right location and that untaxed sales were genuinely exempt.

A worked example

Say you're an IT consultant in California and you invoice a small office for:

• $1,200 of network planning advice — a pure service, not taxable, and
• $400 for a router you sell them — a tangible product, taxable.

If the combined rate at the delivery address were 8.75% (a hypothetical rate for this example), the tax is charged on the router only: $400 × 8.75% = $35.00, for an invoice total of $1,635.00. Listing the product on its own line is what makes the calculation clear — and defensible.

Be careful when the service produces the product — for example photography that results in prints, or artwork created for a printed piece. The CDTFA treats some of those service charges as part of the taxable sale, so check its guidance for your trade before you split them.

Selling to customers in other states

If you ship goods or deliver taxable services to customers in another state, that state's rules may apply instead of California's. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check the thresholds and registration rules of each state you sell into — and use that state's rate on those invoices.

Common mistakes on California invoices

• Using only the 7.25% base rate when the delivery address has district taxes on top.
• Taxing pure services that don't produce a physical item.
• Folding delivery charges into the product price instead of listing them separately.
• Accepting a resale certificate that is incomplete or clearly not for resale items.
• Forgetting to update rates when new district taxes take effect at the start of a quarter.

Quick checklist for California invoices

• ✅ Seller's permit in place before you make taxable sales
• ✅ Correct combined rate for the delivery address
• ✅ Taxable and non-taxable lines separated
• ✅ Sales tax shown as a separate line
• ✅ Resale or exemption certificates on file for untaxed sales