What Is the Sales Tax in Los Angeles, CA?
Get clear information on sales tax in Los Angeles, CA. Understand its role in consumer spending for local purchases.
Sales tax is a consumption tax applied to the sale of goods and services, serving as a significant revenue source for government entities. These funds support public services like infrastructure, education, and public safety. Understanding sales tax is important for consumers and businesses, especially in Los Angeles, California, where multiple tax jurisdictions contribute to the total rate. This article focuses on the specific sales rates and regulations applicable within Los Angeles.
Current Sales Tax Rate in Los Angeles
As of April 1, 2025, the combined sales tax rate in Los Angeles, California, is 9.75%. This is the total percentage added to the price of most taxable goods and services purchased in the city and unincorporated areas of Los Angeles County. Consumers typically observe this rate on their receipts. The adjustment reflects a recent change driven by local voter-approved measures.
Understanding the Sales Tax Components
The 9.75% combined sales tax rate in Los Angeles is composed of several distinct layers, each contributing a specific percentage. The statewide California sales tax rate accounts for 7.25% of this total. This state portion is further divided, with 6% directed to the state’s general fund and 1.25% allocated to county and city funds for local programs.
Los Angeles County adds a local sales tax component of 1.00%. A special district tax rate of 1.50% is also applied. This special tax includes funds generated by Measure A, approved by voters in November 2024 and effective in April 2025, replacing a previous measure to support homelessness services and affordable housing initiatives.
Goods and Services Subject to Sales Tax
Sales tax in California generally applies to the retail sale of tangible personal property. This encompasses a broad range of physical items, such as clothing, electronics, furniture, and most household goods. Restaurant meals are also typically subject to sales tax, as they are considered sales of prepared food.
The application of sales tax to services is more limited. Services are not taxed unless specifically enumerated as taxable by law or if they involve the creation or fabrication of a tangible product. For instance, a service that results in a custom-made item would likely incur sales tax on the final product. Businesses engaged in manufacturing or fabrication often see their labor costs included in the taxable price of the goods produced.
Exemptions from Sales Tax
Several common exemptions exist to reduce the tax burden on everyday necessities. Most food products sold for home consumption, commonly known as groceries, are exempt from sales tax. This exemption applies to unprepared foods like fresh produce, meats, and packaged pantry staples.
This exemption does not extend to all food items. Hot prepared foods, such as those purchased at a restaurant or a hot deli counter, are generally taxable. Alcoholic beverages, carbonated drinks, and certain candies typically incur sales tax. Prescription medications are also exempt, along with some medical devices, when dispensed by a licensed professional or purchased for specific medical use.