San Diego’s sales tax increase took effect on April 1, 2025, raising the combined rate inside city limits from 7.75% to 8.75%. The extra penny on the dollar comes from Measure E, a 1% local tax that city voters narrowly approved in November 2024.1City of San Diego. Measure E – Impartial Analysis, Ballot Title, and Summary It applies only within the City of San Diego, so shoppers in neighboring cities and in unincorporated parts of the county still pay the old 7.75% rate.
The New Rate and When It Started
The combined rate inside the City of San Diego is now 8.75%. That figure stacks the state base, the county portion, and the city’s new 1% add-on. Before April 1, 2025, city residents paid the same 7.75% as most of the surrounding county. The one-percentage-point difference is the city’s alone.2City of San Diego. Office of the Independent Budget Analyst Report – Fiscal Impact Statement for City Measure on November 5, 2024 Ballot Measure E
The April 1 start date was not arbitrary. California requires new local tax ordinances to take effect on the first day of a calendar quarter, and no sooner than 110 days after the election that approved them.3California Department of Tax and Fee Administration. California Revenue and Taxation Code 7265 – Operative Date of Ordinance Counting forward from November 2024 put the first eligible quarter at April 1, 2025, and the California Department of Tax and Fee Administration recorded the new rate as operative on that date.4California Department of Tax and Fee Administration. Explanation of Tax Rate Changes
Who Pays the Higher Rate and Who Doesn’t
The 8.75% rate applies inside the incorporated limits of the City of San Diego. Those limits stretch from La Jolla and Pacific Beach along the coast through downtown and south to San Ysidro at the Mexican border. A store sitting a block outside the city line, whether in an unincorporated pocket of the county or in a separate incorporated city like Chula Vista, Escondido, or Poway, is not covered by Measure E. The rate at those addresses stays at 7.75% unless that jurisdiction has its own local add-on.
The practical gap: on a $1,000 taxable purchase, shopping outside city limits saves $10. On a car, the gap is larger, and the registration rule removes an obvious workaround (more on that below).
If you are not sure which side of a city boundary an address falls on, the CDTFA’s lookup tool at maps.cdtfa.ca.gov returns the exact combined rate for any street address in California.5California Department of Tax and Fee Administration. Find a Sales and Use Tax Rate It updates whenever rate changes take effect, which makes it the most reliable check for addresses near the city line.
One boundary worth flagging: Measure E does not change how sales on tribal land are taxed. Non-Native retailers on reservations in San Diego County generally still owe California sales or use tax on sales to non-tribal customers and to tribal members who don’t live on the reservation, under rules that pre-date the measure.6California Department of Tax and Fee Administration. Tax Guide for Native Americans – Retailers
What Gets Taxed at the Higher Rate
Measure E raises the rate on the same things California has always taxed: retail sales of tangible personal property, meaning anything you can see, weigh, measure, or touch.7California Department of Tax and Fee Administration. California Revenue and Taxation Code 6016 – Tangible Personal Property Clothing, electronics, furniture, appliances, building materials, and most other physical goods you buy in a store or online are included.8California Department of Tax and Fee Administration. What Is Taxable?
Several familiar exemptions carry through unchanged:
- Most groceries bought for home consumption are not taxed. Prepared food, hot food, and food sold for on-premises consumption are taxable.9California Department of Tax and Fee Administration. Sales and Use Tax Regulations – Regulation 1602 Food Products
- Prescription drugs dispensed by a registered pharmacist are exempt.10California Department of Tax and Fee Administration. Drugstores
- Most services, including professional, medical, and personal services, are not subject to sales tax in California. You pay on the goods portion of a transaction, not on the labor, unless the service delivers a taxable product.
Online Orders
For items shipped to your home, the rate is set by the delivery address. Order something online to a City of San Diego address and you owe 8.75%, regardless of where the seller is located. California requires any retailer with more than $500,000 in annual California sales to collect and send in the tax at checkout,11California Department of Tax and Fee Administration. California Revenue and Taxation Code 6203 – Collection by Retailer so most major online purchases already include the correct rate.
Vehicles
Buying a car works differently from buying a sofa. For vehicles, the tax rate is tied to the address where you register the car, not the dealership’s address. Driving to a lower-tax city to buy does not help; the DMV applies your home rate at registration, and the same rule covers private-party sales.12California Department of Tax and Fee Administration. Tax Guide for Purchasers of Vehicles On a $40,000 vehicle, a city resident now pays $3,500 in sales tax, up from $3,100 before the increase.
Where the Revenue Goes
Measure E is projected to bring in about $400 million per year, and the money flows into the city’s general fund with no legal strings attached.1City of San Diego. Measure E – Impartial Analysis, Ballot Title, and Summary The ballot described priorities like fixing potholes, repairing streets and sidewalks, upgrading parks and libraries, and improving police, fire, and paramedic response, but none of those are binding spending requirements.13Ballotpedia. San Diego, California, Measure E, Public Services Sales Tax Measure The city council decides the actual allocation each year through the regular budget. The measure requires citizen oversight and independent audits of how the money is used.
Measure E has no sunset date. The ballot language keeps it in effect “until ended by voters,” so repealing or reducing the tax would require another election.
What Didn’t Pass
A second tax question on the same November 2024 ballot, Measure G, proposed a half-cent county-wide sales tax to fund SANDAG transportation projects. Because its revenue was earmarked for specific uses, it needed a two-thirds supermajority and fell short with roughly 49.5% of the vote.14Ballotpedia. San Diego County, California, Measure G, Infrastructure, Transportation, and Safety Projects Sales Tax Measure The result: no county-wide sales tax layer was added, which is why rates outside the City of San Diego stayed flat at 7.75%.
How San Diego Compares to Other California Cities
At 8.75%, San Diego now matches Sacramento. Los Angeles sits higher at 9.75%, San Jose at 9.375%, and San Francisco at 8.625%. Some smaller cities in Los Angeles County top 10.25% once multiple district taxes stack up. California’s statewide base rate is 7.25%, and most local combinations land between the high 7s and the low 9s.15California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates The increase moved San Diego from the lower end of that range into the middle.