The sales tax rate in Novato, California is 9.25%, effective April 1, 2025, after voters approved a new local tax measure in November 2024.1City of Novato, CA. Novato Businesses to Collect New Sales Tax Starting April 1 That rate is a stack of state, county, and city levies rather than a single tax, and it applies to taxable purchases made or delivered within city limits.
How the 9.25% Breaks Down
Every receipt in Novato reflects three layers:
- California’s statewide base rate of 7.25%, which applies in every city and county in the state.2California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rate Information
- District taxes totaling 2.00% on top of the base. These include Marin County transportation and other countywide assessments plus two Novato city measures.
- The two city measures within that 2.00%: Measure C at 0.25% and Measure M at 0.75%.
California law caps the combined rate of all district taxes in any county at 2%, so Novato sits right at the statutory ceiling.3California Department of Tax and Fee Administration. Revenue and Taxation Code 7251.1 – Limitation: Rate of Tax The California Department of Tax and Fee Administration (CDTFA) collects the full amount from retailers and distributes each slice to the state, county, or city.
The Two Novato City Measures
Two voter-approved measures make up the city-specific portion.
Measure C
Novato voters first approved a local sales tax in 2010, then extended and reduced it through Measure C in November 2015. That extension lowered the city’s rate from 0.50% to 0.25% while keeping the revenue flowing into the general fund for any city purpose.4City of Novato, CA. Frequently Asked Questions About Measure C Because Measure C is a general tax rather than one earmarked for a single project, it passed with a simple majority. It includes citizen oversight and independent reporting.
Measure M
In November 2024, Novato voters approved Measure M, a separate 0.75% sales tax projected to generate roughly $10 million a year in locally controlled revenue.5City of Novato, CA. Measure M Collection began April 1, 2025, and that is why Novato’s rate moved up to 9.25%. Like Measure C, Measure M is a general tax, so the city can direct the funds across priorities including public safety, street repair, park maintenance, and wildfire prevention. The measure runs until voters choose to end it and requires independent annual audits and citizen oversight.
Together, the two measures add 1.00% in locally controlled revenue that state budget fluctuations cannot redirect.
What Gets Taxed in Novato
The 9.25% rate applies to tangible personal property: physical items you can see, touch, or weigh.6California Department of Tax and Fee Administration. California Revenue and Taxation Code 6016 – Tangible Personal Property Clothing, electronics, furniture, appliances, and most retail goods are taxable. The tax is technically imposed on the retailer for the privilege of selling at retail, though it gets passed through to the buyer on the receipt.7California Department of Tax and Fee Administration. Revenue and Taxation Code 6051 – Imposition and Rate of Sales Tax
Most services are not subject to sales tax. If you pay a plumber for labor or hire an accountant, there’s no sales tax on the service. The line blurs when a service produces a physical product, such as a jeweler creating a custom ring; the finished piece is taxable.
Groceries and Food
Groceries sold for home consumption are generally exempt. The exemption covers produce, meat, dairy, eggs, bread, cereal, and canned goods, along with bottled water and most non-carbonated beverages.8California Legislative Information. California Revenue and Taxation Code 6359 Carbonated drinks, alcohol, and dietary supplements are taxable.
Hot prepared food is always taxable, whether it’s a rotisserie chicken, a heated burrito, or soup from a steam table. Cold food follows the “80/80 rule”: if more than 80% of a seller’s gross receipts come from food and more than 80% of those food sales are themselves taxable, cold takeout is taxed too.9California Department of Tax and Fee Administration. Sales and Use Tax Regulations – Article 8 Practically, that cold bottled water is taxable at a sit-down restaurant but tax-free at a grocery store.
Prescription Medicine
Prescription medications are exempt when prescribed by a licensed physician, dentist, or podiatrist and dispensed by a registered pharmacist.10California Department of Tax and Fee Administration. Sales and Use Tax Law – Section 6369 The exemption extends to medicines furnished directly by a physician for patient treatment and to medicines sold to health facilities. Over-the-counter drugs purchased without a prescription do not qualify.
Shipping Charges
If a seller labels the fee “shipping,” “delivery,” “freight,” or “postage” and lists it separately on the invoice, it’s generally not taxable. A charge labeled “handling” is taxable.11California Department of Tax and Fee Administration. Shipping and Delivery Charges If the seller doesn’t separately break out delivery or doesn’t keep records of actual shipping costs, the whole charge becomes taxable.
Online Purchases and Use Tax
California requires you to pay use tax on taxable items purchased from out-of-state or online sellers when sales tax wasn’t collected at checkout. The use tax rate matches the sales tax rate for your location, so in Novato it’s 9.25%.12California Department of Tax and Fee Administration. California Use Tax Items exempt from sales tax are equally exempt from use tax.
In practice, most large retailers and marketplaces like Amazon, eBay, and Etsy already collect California tax at the correct local rate at checkout. State law requires any platform that facilitates sales of tangible goods for delivery in California to collect and remit the tax, regardless of where the seller is located.13California Department of Tax and Fee Administration. Sales and Use Tax Law – Chapter 1.7 Use tax still comes up when you buy from a smaller out-of-state vendor that doesn’t collect California tax, or when you bring taxable goods back from a trip. Most individuals can report and pay use tax on their California state income tax return.
Buying a Vehicle in Novato
Buying a car from a private party instead of a dealership doesn’t avoid the tax; it changes who collects it. Private-party vehicle purchases are subject to use tax, which you pay to the DMV when you register the vehicle.14California Department of Tax and Fee Administration. Tax Guide for Purchasers of Vehicles The rate is based on where you register the vehicle, so a Novato address means 9.25%. The tax applies to the total purchase price, including any loans assumed, property traded, or services exchanged.
Vehicles received as genuine gifts are not subject to use tax, but the standard is strict: the previous owner must have given the vehicle freely with no payment, trade, or compensation. You’ll need documentation such as a signed statement from the former owner and a copy of the title. If you paid sales or use tax on the same vehicle in another state, you can claim a credit against the California amount owed. Tax on vehicles cannot be reported on your state income tax return; it must be paid through the DMV or directly to CDTFA, with payment due by the last day of the month following the purchase.
If You Sell in Novato
If you sell or lease tangible personal property in Novato, you need a California seller’s permit, whether you operate from a storefront, a home office, or a weekend booth. Even temporary sellers at an event lasting up to 30 days need a temporary permit.15California Department of Tax and Fee Administration. Your California Seller’s Permit Out-of-state businesses exceeding $500,000 in combined California sales in the current or preceding calendar year must also register.
CDTFA requires sales and use tax records to be kept for at least four years.16California Department of Tax and Fee Administration. Sales and Use Tax Records Missing a filing deadline triggers an automatic penalty of 10% of the taxes owed for the reporting period, with no finding of carelessness required.17California Department of Tax and Fee Administration. Regulation 1703 Interest accrues on any unpaid balance; for 2026, the underpayment rate is 10% per year.18California Department of Tax and Fee Administration. Interest Rates Relief from the penalty requires a written request, submitted under penalty of perjury after receiving a determination, showing the failure was caused by circumstances beyond your control.