California: Sales Tax Handbook
What purchases are exempt from the California sales tax?
While the California sales tax of 6.00% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in California.
Sales Tax Exemptions in California
Medical devices such as prosthetics are exempted from sales tax. In addition, certain groceries, hot beverages, some types of farm items, and certain alternative-energy device are also considered to be exempt from the California sales tax.
Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for California:
These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.
Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":
Are services, shipping, installation, etc taxable in California?
The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the California sales tax see the California sales taxability FAQ page.
Other tax-exempt items in California
This table lists a number of additional categories of goods and services that are exempt from California's sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in California.
|Food and Meals|
|Grocery Food||EXEMPT *|
|Manufacturing and Machinery|
|Raw Materials||EXEMPT *|
|Utilities & Fuel||EXEMPT *|
|Medical Goods and Services|
|Medical Devices||EXEMPT *|
|General Occasional Sales||EXEMPT|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||EXEMPT|
|Software and Digital Products|
|Canned Software - Downloaded||EXEMPT *|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
* See notes in category taxability page for details
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