Unlike many other states, California does not tax services unless they are an integral part of a taxable property transfer. Retail sales of tangible items in California are generally subject to sales tax. Examples include furniture, gift items, toys, antiques, and clothing. Some labor services and associated costs are subject to sales tax if they are involved in the creation or manufacture of new tangible personal property.
Some services also require sales taxes to be levied, but it can be complicated. If the service is “inseparable” from the sale of a physical product, that service may also be taxable. It includes services such as configuring, manufacturing, or assembling machines or equipment. The taxation of various transactions (such as services and shipping) may vary from state to state, as can policies on topics such as whether the special taxes or installation fees included in the purchase price are also subject to sales tax.
District taxes are approved by local voters and are used for special services, such as libraries or general services.
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