Whether you’re shopping for a new pair of shoes or ordering takeout in San Francisco, sales tax is something you’ll likely encounter. In California, sales tax is a state-imposed tax added to the price of goods and some services. While the tax rate is consistent across the state, San Francisco has its own set of additional regulations and local taxes that impact the rate consumers pay at checkout.
Understanding the basics of sales tax in San Francisco, California, can help you avoid confusion and ensure you’re properly accounting for taxes, whether you’re a consumer making a purchase or a business owner trying to comply with the law.
In this article, we will discuss the current sales tax rates in San Francisco, which products and services are taxed, exemptions, and tips for businesses to stay compliant.
Sales Tax Rate in San Francisco
As of 2025, the sales tax rate in San Francisco is 8.625%. This rate is made up of:
- State Sales Tax: 7.25% (this is the base rate for California)
- Local Sales Tax: 1.375% (specific to San Francisco)
While this might seem like a small difference, it’s important to note that this rate applies to most purchases in the city. From clothing and electronics to meals at restaurants, San Francisco applies sales tax to many goods and services you might buy.
However, the San Francisco sales tax rate can change periodically. So, it’s important for consumers and businesses to stay informed of any rate adjustments.
For more up-to-date information, you can visit the California Department of Tax and Fee Administration (CDTFA).
What Is Taxable in San Francisco?
Most tangible personal property is subject to sales tax in San Francisco. This includes products you can touch and take home, like:
- Clothing
- Electronics
- Furniture
- Toys
- Automobiles
But not all purchases are taxable. There are several exemptions to consider.
Exemptions to Sales Tax in San Francisco
- Groceries: Most unprepared food items sold for human consumption are exempt from sales tax. For example, fresh fruits, vegetables, and raw meats sold at grocery stores are tax-free. However, prepared foods, like restaurant meals or food sold at delis, are subject to sales tax.
- Prescription Drugs: Prescription medications are also exempt from sales tax in California. If you have a prescription for medicine, you won’t be charged sales tax on your purchase.
- Certain Services: While many services are not subject to sales tax in California, some are. For instance, services related to tangible goods, like repairing a car or installing a new appliance, may be taxable. But services like haircuts or legal consultations are generally not taxed.
Sales Tax on Services in San Francisco
In general, services are not taxed under California’s sales tax laws. However, there are exceptions. Here are a few key examples:
- Services Related to Tangible Goods: For instance, if you hire a plumber to fix a faucet or a mechanic to repair your car, the service is taxable because it’s related to tangible property. The repair service fee is subject to sales tax.
- Rental Services: If you’re renting equipment or property, such as a car or a party hall, the rental charge will generally be subject to sales tax.
- Professional Services: Professional services like legal advice, accounting, and consulting are generally not subject to sales tax.
For more specific details, visit the California Department of Tax and Fee Administration.
Sales Tax on Online Purchases in San Francisco
The rise of online shopping has led to new questions about how sales tax applies. Here’s what you need to know if you live in San Francisco and shop online:
- In-State Retailers: If you buy from an online retailer located in California, they are required to charge sales tax based on the destination of the sale. This means if you’re in San Francisco, they will apply the 8.625% sales tax to your order.
- Out-of-State Retailers: If you’re purchasing from an online store located outside California, the sales tax rules vary. The retailer may charge you sales tax if they have a physical presence or have met the threshold for sales in California (often based on total sales volume).
In some cases, out-of-state retailers might not charge sales tax, but it’s your responsibility to report those purchases on your state income tax return and pay the use tax on those items.
How to Calculate Sales Tax in San Francisco
If you’re trying to calculate sales tax on a purchase, it’s quite simple:
- Take the total purchase price of the item (before tax).
- Multiply the price by the San Francisco sales tax rate (8.625%).
- Add the tax to the original price to get the final amount you owe.
For example, if you buy a $100 item in San Francisco, the calculation would look like this:
- $100 x 8.625% = $8.63 (sales tax)
- $100 + $8.63 = $108.63 (total price)
Sales Tax on Business Transactions in San Francisco
If you run a business in San Francisco, it’s essential to understand how sales tax applies to your sales. Here’s a step-by-step guide on how to stay compliant:
Step 1: Register for a Sales Tax Permit
If your business sells taxable goods or services, you’ll need to register with the California Department of Tax and Fee Administration (CDTFA) for a sales tax permit. This permit allows you to collect sales tax from customers.
Step 2: Collect Sales Tax from Customers
As a business owner, you are responsible for collecting sales tax on most sales. Be sure to charge the correct rate of 8.625% for transactions in San Francisco.
Step 3: File Sales Tax Returns
Business owners must regularly file sales tax returns with the CDTFA. You’ll report the sales tax you’ve collected and remit it to the state. The frequency of filing will depend on your business’s sales volume, with quarterly or annual filing options available.
Common Tips for Consumers and Businesses
For Consumers:
- Always check if the product is taxable before making a purchase, especially for larger items.
- If you’re purchasing groceries or prescription medications, be aware that these are typically exempt from sales tax.
- Stay updated on the sales tax rate in San Francisco, as changes can impact your budget.
For Businesses:
- Ensure you have a sales tax permit if required.
- Keep thorough records of taxable and exempt sales to avoid mistakes when filing returns.
- Stay compliant with the California sales tax rules to avoid costly fines or audits.
FAQ: California Sales Tax in San Francisco
1. What is the sales tax rate in San Francisco?
The current sales tax rate in San Francisco is 8.625%, consisting of a 7.25% state rate and 1.375% local rate.
2. Are groceries taxable in San Francisco?
No, most groceries are exempt from sales tax in San Francisco, but prepared food (like meals from restaurants) is taxable.
3. How does sales tax apply to online purchases?
If you’re buying from an in-state retailer, sales tax will be applied based on the San Francisco rate. For out-of-state retailers, tax depends on the retailer’s physical presence or sales volume in California.
4. Are services taxed in San Francisco?
Most services are not taxed, but some, like those related to tangible personal property (e.g., repairs and installations), may be subject to sales tax.
5. How can I register my business for sales tax?
To register your business for sales tax, visit the California Department of Tax and Fee Administration website and apply for a sales tax permit.
By understanding the sales tax rules in San Francisco, you can make smarter shopping decisions, whether you’re a business owner or a consumer. It’s always a good idea to stay updated on tax rates and exemptions to avoid any surprises and ensure compliance.
For more detailed information, visit Tax Laws in USA.