Items not taxed in California include most groceries, prescription medicines, diapers, menstrual products, residential gas, electricity and water, newspapers and periodicals, digital downloads, and standalone services and repair labor. The state’s sales tax applies to tangible personal property at a base rate of 7.25%, climbing as high as 10.75% with local add-ons, but a long list of statutory exemptions keeps everyday essentials and certain transactions outside the tax.
Groceries and Food for Home Consumption
Food products sold for human consumption are exempt under Revenue and Taxation Code section 6359. That covers produce, meat, dairy, eggs, cereals, canned and frozen goods, coffee, tea, candy, bottled water, and fruit and vegetable juices.1California Department of Tax and Fee Administration. California Revenue and Taxation Code 6359 – Food Products
The exemption falls away in several situations:
- Hot prepared food is taxable, with narrow exceptions for hot bakery items and hot coffee sold at a separate price.
- Food served as a meal is taxable whether you eat it on-site or take it to go.
- Food eaten at the seller’s tables, counters, or designated seating area is taxable even when it would otherwise be exempt.
- Food sold through a vending machine is taxable.
- Food sold inside a venue that charges admission is taxable, though national and state parks, campgrounds, and marinas are excluded from that rule.
There is also an “80-80 rule.” When more than 80% of a seller’s gross receipts come from food and more than 80% of the food sold is heated or prepared, all food sales at that location are presumed taxable unless the seller shows otherwise.1California Department of Tax and Fee Administration. California Revenue and Taxation Code 6359 – Food Products
Carbonated beverages, alcoholic drinks, and dietary supplements in pill, capsule, or powder form are not covered by the food exemption.1California Department of Tax and Fee Administration. California Revenue and Taxation Code 6359 – Food Products
Diapers and Menstrual Products
Since January 1, 2020, menstrual hygiene products have been exempt from California sales tax. The exemption covers tampons, sanitary napkins designed for menstrual use, menstrual sponges, and menstrual cups. Diapers are exempt under a companion provision, Revenue and Taxation Code section 6363.9.2California Department of Tax and Fee Administration. California Revenue and Taxation Code 6363.10 – Menstrual Hygiene Products
Prescription Medicines and Medical Devices
Prescription medicines are exempt. Under California Code of Regulations title 18, section 1591, “medicines” includes any FDA-approved drug or biologic used to diagnose, treat, or prevent disease, along with substances commonly recognized for medical use applied to the human body.3California Department of Tax and Fee Administration. 18 CCR 1591 – Medicines and Medical Devices The exemption extends to certain medical devices and appliances when dispensed on a prescription by a licensed physician, dentist, optometrist, or podiatrist.4Legal Information Institute. California Code of Regulations Title 18 1591 – Medicines and Medical Devices
Over-the-counter medicines bought without a prescription are generally taxable. The prescription itself is what triggers the exemption, so the same product can be tax-free or taxable depending on how it was purchased.
Residential Gas, Electricity, and Water
Gas, electricity, and water delivered through mains, lines, or pipes are exempt under Revenue and Taxation Code section 6353. The exemption also covers steam and geothermal energy delivered the same way.5California Legislative Information. California Revenue and Taxation Code RTC 6353 The exemption applies to the utility service itself; appliances and fixtures you buy to use those utilities are taxable like any other tangible property.
Newspapers and Periodicals
Newspapers and periodicals published at regular intervals are exempt. Regulation 1590 defines a “newspaper” as a publication distributed daily, weekly, or at other short intervals for the dissemination of general-interest news. A “periodical” appears at stated intervals, with each issue related to prior or future issues in subject matter or literary character.6California Department of Tax and Fee Administration. Regulation 1590 – Newspapers and Periodicals Materials that become part of a newspaper or periodical, like ink and paper, are exempt when distributed by nonprofit organizations.7California Department of Tax and Fee Administration. California Revenue and Taxation Code 6362.8 – Newspaper and Periodicals Distributed by Nonprofit Organizations
Digital Downloads and Streaming
California generally does not tax digital products delivered electronically. Software downloaded over the internet, e-books, music files, streaming content, and mobile apps are typically not subject to sales tax because they are not considered tangible personal property. Delivery method matters: if the same software arrives on a USB drive or other physical medium, the entire sale becomes taxable. Some local jurisdictions impose a utility user tax on streaming services, so you may see a separate charge on your bill that is not state sales tax.
Services and Repair Labor
Sales tax applies to tangible personal property, not to labor or services on their own. Professional services like legal consultations, accounting, medical visits, and haircuts carry no sales tax. Repair labor is also untaxed when itemized separately on your bill.8California Department of Tax and Fee Administration. Labor Charges Publication 108 – Nontaxable Charges
The line blurs when a service involves tangible property. If a mechanic replaces your water pump, the labor is not taxable, but the replacement parts are. When the retail value of parts and materials exceeds 10% of the total charge, or the repair person bills separately for them, tax applies to those parts at their full retail price.8California Department of Tax and Fee Administration. Labor Charges Publication 108 – Nontaxable Charges
Fabrication labor is treated differently. When someone creates a new piece of tangible property for you, the labor is taxable along with the materials.9California Department of Tax and Fee Administration. Labor Charges Publication 108 Custom-built furniture is fully taxable because the labor produced a new item rather than repairing an existing one. Installation labor stays untaxed as long as it does not cross into fabrication.
Agricultural Seeds, Feed, and Fertilizer
California exempts several agricultural inputs. Seeds and plants whose products ordinarily constitute food for human consumption are untaxed, including fruit trees, berry vines, and grape rootstock. Feed for livestock raised for food production is exempt, as is fertilizer applied to land producing food for human consumption or feed crops.10California Department of Tax and Fee Administration. Regulation 1588
Resale Purchases and Occasional Sales
When a retailer or wholesaler buys inventory to resell, the purchase is exempt. Tax is collected later, when the item reaches the final consumer, which prevents the same product from being taxed twice as it moves through the supply chain.11Legal Information Institute. California Code of Regulations Title 18 1668 – Sales for Resale To claim the exemption, the buyer gives the seller a valid resale certificate that either lists the specific items or generally describes the types of goods the buyer ordinarily sells.12California Department of Tax and Fee Administration. Sales for Resale Publication 103
A one-time garage sale or sale of personal belongings is usually exempt as an “occasional sale” under Revenue and Taxation Code section 6367.13California Department of Tax and Fee Administration. California Revenue and Taxation Code 6367 – Occasional Sales The exemption has limits. A person who makes three or more sales for substantial amounts within a 12-month period is generally considered to need a seller’s permit, and those sales are no longer occasional. Sales made outside California count toward that threshold.14California Department of Tax and Fee Administration. Regulation 1595 – Occasional Sales, Sale of a Business, Business Reorganization If you regularly sell items online or at flea markets, you have almost certainly crossed that line.
Things People Assume Are Exempt but Are Not
A few categories catch Californians off guard because other states treat them differently:
- Clothing is fully taxable in California, unlike in states such as New York and Pennsylvania.15State of California Taxes. What Is Taxable
- Carbonated beverages, including soda and sparkling water, are explicitly excluded from the food products exemption and are taxable even at a grocery store.1California Department of Tax and Fee Administration. California Revenue and Taxation Code 6359 – Food Products
- Beer, wine, and spirits are taxable. The food exemption specifically excludes “spirituous, malt, or vinous liquors.”1California Department of Tax and Fee Administration. California Revenue and Taxation Code 6359 – Food Products
- Restaurant meals and any food sold hot are taxable, whether eaten on-site or taken home.16California Department of Tax and Fee Administration. Common Sales and Use Tax Nontaxable Sales and Partial Exemptions
- Furniture, electronics, and household goods are standard tangible personal property with no special exemption.
- Over-the-counter medications and dietary supplements are taxable despite the prescription-medicine exemption.