Skip to main content
Avalara Help Center

How does California's sourcing work?

Overview

You want to know how California's tax rates are obtained when calculating tax

Environment

Avalara AvaTax

Resolution

 

California is a mixed-sourcing state. The Tax rates are taken from both the origin and the destination address, if they are both in California

  • From the Origin Address:
    • The Statewide Base Sales and Use Tax Rate is 7.25%, and is sourced from the origin address. This rate includes 1.25% in local taxes (0.25% goes to county transportation funds, 1% goes to city or county operations)
    • The Statewide Base Sales and Use Tax Rate is comprised of the following components: state and local (county/city)
      • State – 6%
      • Local Transportation fund (County of place of sale or use) – 0.25% (In AvaTax, Jurisdiction Type will be “County.”)
      • Local Jurisdiction (City or county of place of sale or use) – 1% (In AvaTax, Jurisdiction Type will be “Special.” The Jurisdiction Name will include “Local Tax SL.”)
  • From the Destination Address:
    • Tax rates aside from the foregoing are “district taxes.” District taxes may be levied on a countywide basis and within incorporated city limits.
      • In AvaTax, County District Tax will be represented by “Jurisdiction Type: Special, Jurisdiction Name: County District Tax SP.”
      • In AvaTax, City District Tax will be represented by “Jurisdiction Type: City.”

Note: Certain types of services are taxed entirely at the destination address, check the tax code using the Basic Tax Calculator (Go to Tools Basic Tax Calculator) to confirm specific sourcing for a single tax code.