Minimum Sales Rate Tax for 2024
| 6.00% | Column content | Column content | Column content | Column content | |
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| 0.5% | Column content | Column content | Column content | Column content | |
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| Minimum combined sales tax rate value | 7.75% | Column content | Column content | Column content | Column content |
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| Economic sales nexus threshold | $500,000 | Column content | Column content | Column content | Column content |
| Transactions threshold | N/A | Column content | Column content | Column content | Column content |
| Sales tax return filing due date | 30th of the month following the reporting period. | Column content | Column content | Column content | Column content |
The statewide state sales tax rate in California is 7.25%, but since the County district Tax Sp is 0.5%, the minimum sales tax rate for San Diego is 7.75%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Looking for help calculating your sales tax? Contact us today to book a free consultation!
What is nexus?
In San Diego businesses must understand “nexus” to determine their tax obligations. Nexus refers to the connection that requires a business to collect sales tax in a state. This concept became even more important after the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which allowed states to require sales tax collection based on economic activity rather than just a physical presence.
Specific sales tax rules for San Diego
In the City of San Diego, all businesses, including home-based and independent contractors, must obtain a Business Tax Certificate. The annual fee for this certificate is based on the number of employees: $34 for businesses with 12 or fewer employees, and $125 plus $5 per additional employee for businesses with 13 or more employees. Rental Unit Business Tax is imposed annually on those who own or manage rental properties within the city, with retroactive billing for up to three years, along with applicable late fees.
For cannabis-related businesses, the tax initially began at 5% of gross receipts, increasing to 8% in 2019. However, as of May 1, 2022, cannabis production facilities are taxed at 2% of gross receipts.
The city also enforces the Transient Occupancy Tax (TOT) on properties rented to guests for less than a month, including hotels, motels, short-term rentals, and RV parks. The TOT rate is 10.5%, while the Tourism Marketing District (TMD) assessment, applicable to lodging businesses with 70 or more rooms, is 2%. Both TOT and TMD are calculated as a percentage of the rent and must be collected by operators and remitted to the city monthly.
Services
Generally not taxable unless tied to the sale of taxable goods, recreational activities, or the repair/maintenance of taxable items.
Goods
Most items like appliances, cars, furniture, sporting equipment, and electronics are subject to sales tax.
Clothing
Taxable.
Electronics
Taxable.
SaaS
Not taxable, as it is classified as a service.
Digital Products
Generally not taxable if delivered electronically.
Software
Taxable when downloaded.
Freight/Shipping
Shipping charges for taxable goods are also taxable unless itemized separately on the invoice.
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