San Francisco, California Sales Tax 2026

As the largest city in California and a major center for entertainment, manufacturing, ecommerce, and international trade, San Francisco attracts businesses operating both locally and remotely. From retailers with storefronts across the city to online sellers shipping products into San Francisco, understanding sales tax responsibilities is critical for compliance.

You are required to collect sales tax in San Francisco if your business has established a sales tax nexus in California and you sell taxable goods to customers located in San Francisco. This requirement applies to both in-state businesses with a physical presence and out-of-state sellers that meet California’s economic nexus threshold.

If nexus is established, sellers must collect the appropriate combined state, county, and district sales tax rate based on the buyer’s location in San Francisco.

A sales tax nexus is created based on your business’s significant presence in a state. Two types of sales tax nexus determine your business’s presence in a state: physical nexus and economic nexus.

Physical Nexus

A physical nexus is established by having a substantial physical presence or engaging in enough taxable sales activities within a state. Several factors determine a physical nexus in California.

• Physical Location: This means having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
• Inventory in the State: This applies to situations where you store products within the state, whether it’s done via a third-party fulfillment center or 3PL (such as Amazon FBA) or an online marketplace.
• Business Representatives: Having employees, independent contractors, agents, or other representatives operating within the state on your behalf.
• Affiliate Nexus: You could trigger a physical nexus if you have affiliates, whether they operate online or in-person, who have collectively sold more than $500,000 worth of products for delivery in California in the preceding or current calendar year.
• Presence at Trade Show: You must collect sales tax at California trade shows if you are present for more than 15 days within 12 months and/or making sales of over $100,000.

Economic Nexus

Economic nexus is established based on two common factors. First is your business’s total sales revenue, and second is the number of transactions you’ve had within the state. In California, the economic nexus threshold is:

• $500,000 in gross revenue

To read a comprehensive list of all sales tax rules in San Francisco, California, please refer to the CA Department of Tax and Fee Administration (CDTFA).

Every state has different rules when it comes to the taxability of goods and services. In San Francisco, California, there is a variety of goods that are subject to sales tax and a few that are exempt. Check the table below for reference:

PRODUCT TAXABLE EXEMPT Tangible Products Clothing Jewelry Furniture Computer Hardware Gifts Toys Antiques Cosmetics Electronics Groceries Medical Devices Services All service-based transactions are generally not taxable in California. Fabrication Services Support Services Transactions Involving Tangible Personal Property SaaS and Digital Products SaaS and Digital Products are currently still not taxable in California. n/a Shipping and Handling Shipping and Handling charges are generally not taxable in California. Shipping and Handling charges in California are non-taxable if the following conditions are met: The goods are separately listed on the invoice or contract If listed separately, the seller must provide pickup or free delivery options that allow the buyer to opt out of shipping and handling charges

For in-depth guidance on taxabilities and exemptions on goods and services, read our The Ultimate Guide to Sales Tax in California.

Once you’ve established a sales tax nexus in San Francisco, California, your next step is making sure you stay compliant by registering your business for a sales tax permit, also known as a seller’s permit or a business license in other states.

To get a sales tax permit in San Francisco, follow our step-by-step guide:

• Step 1: Prepare the following necessary information and documents:
  • Business Identification Information: Legal business name, physical address, mailing address
  • Business Entity Structure (i.e., sole proprietorship, partnership, Subchapter S Corp., corporation, LLC, etc.)
  • Federal Employer Identification Number (EIN or FEIN)
  • Name, Address, and SSN of owners, partners, or officers
  • Business Activity Details: Date & State of Incorporation, start date with the state of California (nexus start date), Estimated Monthly Sales Tax Liability in California,
  • NAICS Code
• Step 2: Go to the California Department of Tax and Fee Administration (CDTFA) website and select “Register for a Permit, License, or Account,” then choose “Register a New Business Activity.
• Step 3: Answer all required questions and confirm that you are applying for a Seller’s Permit.
• Step 4: Once approved, your seller’s permit and online account security code will be mailed to the address provided. If additional documents are needed, CDTFA will contact you by email.

There is no fee to register for a California seller’s permit, though CDTFA may require a security deposit based on your estimated tax liability. Seller’s permits generally do not require renewal, unless you sell cigarettes or tobacco products. If your business has a physical location in San Francisco, the permit must be displayed at all times.

After registering your business in San Francisco, California, your next step is filing and remitting sales tax returns on time. But before filing your sales tax returns, you must know the filing schedule assigned to you by the state.

To begin filing and remitting your sales tax returns in California, follow our step-by-step guide:

• Step 1: Prepare your ecommerce sales tax data (e.g., Taxes Report from Shopify)
• Step 2: Go to the CDTFA Online Services website.
• Step 3: Log in using your username and password from the 1Password vault. Check your shared email or phone number and input the OTP when applicable.
• Step 4: Click the “Sales and Use Tax” hyperlink on the dashboard.
• Step 5: Click “File Return” next to the filing period you want to process.
• Step 6: Select the applicable option (such as a regular or amended return), then click Next.
• Step 7: Enter your Total Sales amount for the period, then click Next.
• Step 8: Enter any Additional Sales details if applicable, then click Next.
• Step 9: Select and click the applicable options (e.g., deductions, exemptions, or adjustments), then click Next.
• Step 10: Enter County Sales information based on your Shopify Sales Tax Report, then click Next.
• Step 11: Update your Tax Jurisdiction data as required, then click Next.
• Step 12: Select the applicable option for excess tax or additional adjustments, then click Next.
• Step 13: Enter any Excess Tax Collected during the period, then click Next.
• Step 14: Review all balances carefully, verify that they match your Shopify report, then click Next.
• Step 15: Fill out the Preparer Information (name, title, and contact details) and click Submit.
• Step 16: Save the confirmation in your preferred location for recordkeeping purposes. Keeping online records using Google Drive is a common option.

Helpful tip: You can always click “Save and Submit Later” to avoid losing progress during interruptions such as internet issues or CDTFA system downtime. NOTE: Late filings result in penalties and fees. Are you also filing sales tax in other states like New York? Check out: How to File New York Sales Tax Online

If you make retail sales in California subject to the state sales tax from a business located in a taxing district, district sales tax is generally due on your sales of tangible personal property. To help you identify the correct sales tax rate in San Francisco, you may look up the sales tax rate by address and ZIP code in our calculator.

94102, 94103, 94109, 94110, 94112, 94114, 94115, 94116, 94117, 94118

1. What purchases are exempt from sales tax in San Francisco?

In San Francisco, sales tax exemptions follow California state law. Common sales tax–exempt purchases include grocery food for human consumption, prescription medications, and certain medical devices. Grocery exemptions do not apply to alcoholic beverages, carbonated drinks, or hot prepared foods. Some exemptions may also apply when buyers present valid resale or exemption certificates.

2. Who has the highest sales tax in California?

Cities with the highest sales tax rates in California typically have combined rates of 10.25% or higher, due to multiple district taxes. These often include cities in San Francisco County, Alameda County, and parts of the Bay Area, though exact rankings can change as district taxes are added or expire.

3. Why is California so heavily taxed?

California relies heavily on sales, income, and property taxes to fund public services such as education, transportation, healthcare, and public safety. Sales tax rates are higher in some areas due to local district taxes, which are approved by voters to fund regional projects like transit, infrastructure, and public programs.