5 California Towns With Business-Friendly Sales Tax Rates
- Sep 22, 2015 | Stephanie Faris
California has some of the highest sales tax rates in the nation, with many cities tacking a two percent or higher sales tax onto the state’s 6.5 percent rate. Every city in California must add a one-percent mandatory local sales tax onto that rate, making 7.5 percent a minimum for any business located in the state.
However, some areas of California will take a bigger cut of a business’s earnings than others. South Gate and Pico Rivera now have among the highest tax rates in the state, paying the government 10 percent of every sale. Being among the highest-taxed cities in California can be a detriment to any city, since customers will often gravitate to nearby cities that have lower sales tax.
For that reason, it’s important to consider sales tax when choosing a location for your California-based business. Something as simple as moving a business across city lines could make a big difference. However, it’s important to choose the right city to avoid locating your business in a town where the local economy won’t support your store. Here are five great California cities that charge the minimum sales tax allowed by the state: 7.5 percent.
Bakersfield is the ninth-largest city in California with a population of more than 368,000. A strong agricultural and manufacturing presence draws people to the city, as well as equipping residents with plenty of disposable income. Between the downtown antique district, the Valley Plaza Mall, and the Marketplace, businesses can easily find the perfect location for a storefront or warehouse.
Businesses interested in setting up shop in Los Angeles should consider this city, located only 30 minutes from L.A. The minimum sales tax of nine percent in Los Angeles County doesn’t extend to Simi Valley, which maintains its 7.5-percent rate despite its population of more than 126,000.
With its rich history and culture, Ventura is known for its entertainment, retail, and art. Downtown Ventura is the perfect place to locate a new boutique or gift shop, while the Ventura Harbor Village is ideal for sea-themed businesses. There are also plenty of antique and collectible shops for the area’s bargain shoppers.
This seaside community halfway between San Francisco and Los Angeles has a small population, but a thriving tourism industry. The city eschews chain stores in favor of local shops with charm, which makes it the ideal location for a small boutique or diner. In addition to daily tourists, visitors come to the town for a variety of annual festivals.
Another unique California town is Yuba City, known as the home to Sunsweet Growers Inc., which manufactures prunes and apricots for the entire country. The Yuba Sutter Mall houses many of the town’s chain stores and the Downtown Business Association promotes nearly 100 locally-owned businesses.
California’s sales tax can vary dramatically from city to city. By being fully aware of the cities with the lowest rates, a business can save money while also attracting customers. As a bonus, many of these cities have a charm not found in neighboring cities, offering a business access to some of the most friendly, interesting customers in California.