Making sense of California’s sales tax
As you scan your receipts after Black Friday shopping, take a moment to note that the amount of sales tax you pay varies depending on where you purchased your items.
California’s sales tax varies depending on the city or county — ranging from as little as 7.5% in Ventura County, the statewide minimum, to 8% in Orange County, to as much as 10% in the Los Angeles County suburbs of La Mirada and Pico Rivera.
Los Angeles County has a higher sales tax because of voter-approved taxes in 1980, 1990 and 2008 to fund the public transportation system. As a result, the Los Angeles County minimum sales tax is 9%, but a few cities have pegged on additional taxes, such as Santa Monica, Culver City and City of Commerce, which come in at 9.5%.
FOR THE RECORD:
Sales taxes: In the Nov. 28 California section, a chart showing sales tax rates had a correct scale for Northern California cities, but an incorrect one for Southern California cities. The scale for Northern California correctly began at 6%, but the scale for Southern California incorrectly began at 6.5%. As a result, the sales tax rates depicted for Southern California were erroneously listed as one half percentage point too far to the right.
Is it enough to justify hauling across a city or county line for some savings at the cash register?
Someone living in downtown Los Angeles who wants to buy a $100 pair of pants would pay $1 less in sales tax at South Coast Plaza in Orange County, and $2.50 less in Thousand Oaks in Ventura County. But driving round trip to either mall — 40 miles away — would cost $10 in gasoline, assuming that gas costs $3 a gallon and that a car gets 23 miles per gallon.
Say that you’re planning on buying a $2,000 computer. The tax would be $180 in Los Angeles, but $160 in most of Orange County, and $150 in most of Ventura County. The savings depend on how much more money is spent in gasoline to get there.
Would it make a difference to buy online?
Many mainstream retailers have physical locations in California. So buying something online from Macy’s or Apple will incur the sales tax rate at wherever the product is delivered. Even Amazon has begun collecting sales tax in California, which it did starting in 2012.
There is still a way to buy items online without the retailer collecting the sales tax — they are by companies who have no physical presence in California. But California tax officials say consumers are still responsible for paying the so-called use tax, and can do so either on the state Board of Equalization’s website after every purchase or on their annual income tax filing due April 15 the year after the purchase. Last year, $4.6 billion was paid in use taxes, but state officials estimate that $1 billion went unpaid. The use tax is based on the location where the product will be used.
If I order a computer for myself in higher-tax Los Angeles County, but ship it to my friend in lower-tax Ventura County and drive it back home, I can legally pocket the savings, right?
Actually, no, according to state tax officials. Because the computer would be used in Los Angeles County, the higher tax rate applies, and the difference needs to be paid as a use tax. The easiest way to pay the difference is on your state tax return.
And what about buying a car?
There’s no advantage, in terms of sales tax, on where you go to buy a car. An Orange County resident who buys a car in Santa Monica will stay pay the Orange County sales tax rate. The sales tax rate is charged based on where the car will be registered. Find your sales tax rate here: maps.gis.ca.gov/boe/TaxRates/
What else should I be thinking about? How accurate are item scanners at checkout?
Definitely keep an eye for being overcharged at the cash register.
Los Angeles County has an obscure agency, the Department of Agricultural Commissioner/Weight and Measures, whose job is to inspect whether stores are actually charging the lowest advertised or displayed price. Nearly one out of every five inspected stores have overcharged inspectors.
California law says that it is unlawful for anything to be charged greater than the lowest advertised or displayed price.
The issue of overcharging became an issue in Los Angeles County in 2001 after Los Angeles County Supervisor Gloria Molina was overcharged at a Macy’s and Kmart. A county-ordered study at the time found that overcharges occurred at two-thirds of the 108 stores visited, mostly on discounted items.
So what should I do?
• Pay attention to the price display screen as each item is scanned
• Immediately point out overcharges to the cashier
• Check your receipt for overcharges before leaving the store. Inform the manager or customer service desk about any errors.
• Ask about the store’s policy on overcharges; some will give you the item for free or at a discount.
• In Los Angeles County, report overcharges to the Department of Agricultural Commissioner/Weights and Measures. A report can be filed online at bit.ly/overchargedcomplaint.
Stores that advertise in a false and misleading manner regarding products and prices can be reported to the state Department of Consumer Affairs.
Stores are required to have enough quantities of an advertised item available on the day of sale to meet a reasonable customer demand. Report stores that are repeatedly out of sale items to the Department of Consumer Affairs.
Stores cannot limit how many of an advertised item you can buy unless the advertisement clearly states the number that will be sold to each customer.
When buying an expensive item, ask the store if it has a refund policy on the price difference, should the item go on sale in the future.
Can I look up which stores have been fined for overcharging?
Yes. Los Angeles County lists the citations and fines online, and is searchable by address and ZIP Code. Go to bit.ly/laovercharged.
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