Petaluma Sales Tax: 10.25% Rate, Measure U, and Use Tax

The Petaluma sales tax rate is 10.25% as of 2026, and it applies to most retail purchases of physical goods made inside city limits.¹ That total is California’s 7.25% statewide base plus 3.00% in local district taxes added by the city and Sonoma County. Groceries, prescription medicine, and most digital downloads are not taxed.

How the 10.25% Is Built

Every sale in California starts with the 7.25% state base rate, which is split among the state General Fund, local public safety, county health and social services, county transportation, and city or county operations.²

On top of that floor, Petaluma shoppers pay another 3.00% in district taxes.³ The biggest piece is the city’s own Measure U, which adds 1.00%. Sonoma County’s Measure W, renewed by voters in November 2024, adds 0.125% for the county library system.⁴ The rest funds county programs including transportation and open space. District taxes change when voters approve new measures or let old ones expire, so the combined rate has shifted before and may shift again.

Measure U

Petaluma voters approved Measure U in November 2020 as a general tax. It passed with a simple majority, has no sunset date, and sends revenue into the city’s General Fund rather than earmarking it for one program.⁵ The ballot language identified emergency preparedness, fire protection, police staffing, street repair, and small business support as priorities. The measure was projected to generate about $13.5 million per year and requires independent audits and citizen oversight.

What You Pay Tax On

The 10.25% applies to retail sales of tangible personal property. That covers almost everything you can carry out of a store: furniture, electronics, clothing, vehicles, appliances, housewares.⁶ If it’s a physical object and no specific exemption applies, assume it’s taxable.

Services are treated differently. Pure labor, like hiring an accountant or paying a plumber for a repair, is not taxed. When a service produces a finished object, the rule turns on what the customer is really buying. If the main point of the contract is the finished product, the full price is taxable. A custom furniture maker, for example, charges sales tax on the whole bill because the buyer is paying for the furniture.⁷

What’s Exempt

Groceries, meaning cold food bought for home consumption, are not taxed. Prescription medicine is also exempt, and the definition is broader than most people realize: it covers prescribed drugs, permanently implanted medical devices, prosthetics, and orthotics.⁸ Hot prepared food from a restaurant or deli is fully taxable, even when the same ingredients would be exempt at a grocery store.⁶

Digital Products

California generally does not tax digital products delivered electronically. Software downloads, e-books, streaming music, and digital images sent over the internet are typically exempt. That changes if the seller also hands you a physical copy on a disc or flash drive. In that case the whole sale becomes taxable.

Use Tax on Out-of-State Purchases

If you buy something from an out-of-state seller and no California tax is collected, you still owe use tax at the same 10.25% rate. It most often comes up with online orders from smaller sellers who aren’t set up to collect California tax, or with items you buy while traveling and bring home. The point of the use tax is to keep residents from avoiding local taxes by ordering from out of state.⁹

Most people report use tax on their California income tax return, which has a line for either calculating the actual amount or using a lookup table based on income. For a large untaxed purchase like a vehicle or expensive equipment, you can also report and pay directly to the CDTFA.

If You’re Selling in Petaluma

Any person or business selling tangible personal property in Petaluma needs a California seller’s permit from the CDTFA. That includes retailers, wholesalers, individuals, corporations, and LLCs. Temporary sellers at farmers’ markets or holiday pop-ups need a temporary permit when they’ll operate for 90 days or less.¹⁰

The permit itself is free. The CDTFA may require a security deposit to cover potential unpaid taxes if the business later closes, but there’s no application fee. You register online with a valid ID, your Social Security Number or ITIN, projected monthly sales figures, and a description of what you’ll sell. Businesses operating at more than one address may need a separate permit for each location.¹¹

Where the Local Money Goes

The 7.25% base rate flows to the state and county funds set by law.² The 1.00% from Measure U goes entirely into Petaluma’s General Fund, where the City Council allocates it each budget cycle to services like police and fire response, road maintenance, and parks. Because voters approved it as a general tax rather than a special tax, the Council can shift priorities year to year without returning to the ballot.⁵ The 0.125% library share funds Sonoma County Library operations across the county.⁴

1
California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates
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California Department of Tax and Fee Administration. Detailed Description of the Sales and Use Tax Rate
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California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rate Information
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Sonoma County Library. Community Investment in Libraries
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Sonoma County. Measure U – City of Petaluma
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California Department of Tax and Fee Administration. Applying Tax to Your Sales and Purchases
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California Department of Tax and Fee Administration. Sales and Use Tax Regulations – Regulation 1501
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California Department of Tax and Fee Administration. Regulation 1591
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California Department of Tax and Fee Administration. Sales and Use Tax in California
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California Department of Tax and Fee Administration. Obtaining a Seller’s Permit
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California Department of Tax and Fee Administration. Online Services – Registration