Palm Springs Sales Tax: Rate, Exemptions, and Lodging Taxes

The sales tax rate in Palm Springs is 9.25 percent, charged on most retail purchases made inside city limits.¹ The California Department of Tax and Fee Administration confirms this rate as effective January 1, 2026.² Merchants collect it at the register and send it to the state, which then routes each piece to the government that authorized it.

The same 9.25 percent applies as use tax when you buy from an out-of-state or online seller that doesn’t collect California tax. In that situation the obligation shifts to you as the buyer, and you can report it on your California income tax return either by adding up actual purchases or by using the state’s lookup table based on adjusted gross income.³

Where the 9.25 Percent Goes

Four separate levies stack to make up the rate.

State base rate of 7.25 percent. This statewide floor covers California’s general fund, local public safety, and county transportation. Every city in California starts here before adding anything local.⁴
Riverside County Measure A, 0.50 percent. Voters first approved this half-cent transportation tax in 1988 and later renewed it. The money funds road repairs, highway work, and transit projects across the county.⁵
Palm Springs Measure J, 1.00 percent. Approved by city voters in November 2011 and effective April 2012, it funds downtown revitalization, street and pothole repair, the public library, and park and trail improvements.⁶
Palm Springs Measure D, 0.50 percent. Voters added this half-cent in November 2017, effective April 2018. An independent auditor reviews Measure D revenue and spending each year and reports the results at a public City Council meeting.¹

The two city measures together make up 1.50 percent of every taxable dollar spent in Palm Springs, and that portion stays with the city rather than going to Sacramento or the county.

What You Pay Tax On

Sales tax applies to tangible personal property. Clothing, furniture, electronics, vehicles, jewelry, appliances, and building materials all carry the full 9.25 percent at the point of sale.

Restaurants and Prepared Food

Hot prepared food is always taxable, whether you eat in or take it out. California defines hot prepared food products as items heated for sale and sold at any temperature above room temperature, which pulls in grilled sandwiches, steam-table dishes, and anything held under heat lamps.⁷

Cold food is more complicated. Sit-down restaurants tax cold salads and sandwiches because they’re served for consumption on the premises. For cold takeout, taxability turns on the 80-80 rule: if more than 80 percent of a seller’s gross receipts come from food, and more than 80 percent of those food sales are already taxable, then even cold takeout is taxed. Most full-service restaurants cross both thresholds, so in practice nearly everything on a Palm Springs restaurant bill is taxable.⁸

Services

California generally doesn’t tax services. A haircut, a legal consultation, or an accounting fee carries no sales tax on its own. The line blurs when a service is inseparable from a product. Fabrication labor that creates a new item from raw materials is taxable because the result is tangible property, and setup or calibration bundled into an equipment sale is taxed as part of the full price. Repair labor on something you already own is usually exempt, but altering a brand-new garment before first use counts as completing the manufacturing process, which makes that labor taxable.

What’s Exempt

Groceries

Most food bought at a grocery store for home consumption is exempt. Produce, meat, dairy, eggs, bread, cereal, canned goods, and frozen meals all qualify.⁹ The exemption also reaches candy, gum, bottled water, and fruit juice.⁸

Carbonated and alcoholic beverages are not exempt. The statute specifically pulls carbonated drinks out of the tax-free food category, so a bottle of soda is taxable even if the orange juice next to it on the shelf is not.⁷

Prescriptions and Medical Devices

Medicines prescribed by a licensed physician and dispensed by a registered pharmacist are exempt. So are insulin, insulin syringes, glucose test strips, and lancets a pharmacist furnishes for a diabetic patient.¹⁰ Prosthetic devices, wheelchairs, and other qualifying medical equipment fall under the same medicines and medical devices rules.¹¹

Occasional and Garage Sales

Selling used personal items at a garage sale generally doesn’t require a seller’s permit or trigger sales tax. Hold more than two garage sales in a 12-month period and the CDTFA treats you as a regular seller who needs a permit. Anyone who makes three or more taxable sales in 12 months has to register regardless of the setting.¹²

Online and Out-of-State Purchases

Out-of-state retailers whose California sales exceed $500,000 in the current or prior calendar year have to register with the CDTFA and collect tax at the buyer’s local rate, which is 9.25 percent for a Palm Springs address.¹³

For purchases through platforms like Amazon, eBay, or Etsy, California’s marketplace facilitator law makes the platform the legal retailer responsible for collecting and remitting the tax. The platform must count both its own sales and the third-party sales it facilitates when measuring the $500,000 threshold.¹⁴ As a result, nearly every major online marketplace already collects California tax at checkout.

The gap is small independent sellers based outside California who don’t use a marketplace and stay below the $500,000 threshold. If one of them doesn’t charge you tax, you owe use tax on the purchase and can report it either on your California income tax return or through the CDTFA’s online portal.³

Hotel and Vacation Rental Taxes

Lodging is taxed separately from retail goods, and the rates are higher. If you’re booking a Palm Springs trip, expect these to appear as line items on your bill in addition to any sales tax on things you buy during the stay.

Transient Occupancy Tax

The city charges a Transient Occupancy Tax on stays shorter than 28 consecutive days. The rate is 11.5 percent for most hotels, vacation rentals, and booking agencies, and 13.5 percent at group meeting hotels.¹⁵ It applies to the room charge, not to separately stated parking or resort amenity fees.

Tourism Business Improvement District

A separate 1 percent assessment on room revenue funds tourism marketing. For hotels, the TBID applies to properties with 49 rooms or fewer. Vacation rentals and homeshare properties have been subject to the 1 percent TBID since July 2021.¹⁶

Vacation rental operators file TOT and TBID payments monthly through the city’s GovOS platform, and a return is required even in months with zero revenue. Skipping a zero-revenue filing can trigger penalties, which catches new rental owners by surprise.

If You’re the One Collecting Tax

Any business selling or leasing tangible personal property in Palm Springs needs a California seller’s permit before the first sale. The permit itself is free, though the CDTFA may require a security deposit against potential unpaid taxes if the business later closes. Applications go through the CDTFA website.¹⁷ A seller’s permit is not a business license; Palm Springs requires a separate city business license, so you need both before opening.

Late or missing payments draw a 10 percent penalty on the unpaid tax, plus interest that accrues monthly from the original due date, whether the failure was accidental or deliberate.¹⁸ Filing a false return with intent to evade tax is a misdemeanor carrying fines of $1,000 to $5,000, up to one year in county jail, or both. When the unreported liability exceeds $25,000 in any 12-month period, the charge becomes a felony with fines up to $20,000, a prison term of 16 months to three years, or both.¹⁹

1
City of Palm Springs. Sales Tax
2
California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates
3
California Department of Tax and Fee Administration. California Use Tax, Good for You. Good for California
4
California Department of Tax and Fee Administration. Know Your Sales and Use Tax Rate
5
Riverside County Transportation Commission. Measure A
6
City of Palm Springs. Measure J Oversight Commission
7
California Department of Tax and Fee Administration. Sales and Use Tax Regulations – Article 8 – Food Products
8
California Legislative Information. California Code Revenue and Taxation Code 6359
9
California Department of Tax and Fee Administration. Grocery Stores
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California Department of Tax and Fee Administration. Drug Stores
11
California Department of Tax and Fee Administration. Regulation 1591 – Medicines and Medical Devices
12
California Department of Tax and Fee Administration. Temporary Sellers
13
California Department of Tax and Fee Administration. Use Tax Collection Requirements Based on Sales into California
14
California Department of Tax and Fee Administration. Sales and Use Tax Law – Chapter 1.7
15
City of Palm Springs. Transient Occupancy Tax (TOT)
16
City of Palm Springs. Tourism Business Improvement District (TBID)
17
California Department of Tax and Fee Administration. Obtaining a Seller’s Permit
18
Justia. California Revenue and Taxation Code 6591-6597 – Interest and Penalties
19
California Department of Tax and Fee Administration. Revenue and Taxation Code – Chapter 10 Violations