California Cities Increase Sales Tax Rates as of April 1, 2025: What Businesses Need to Know

Several cities across California have implemented new local sales and use tax rates effective April 1, 2025, adding pressure to already complex tax compliance obligations for retailers, service providers, and e-commerce businesses.

The California Department of Tax and Fee Administration (CDTFA) has officially released the updated tax rate schedules, with increases in cities such as Lancaster, Palmdale, Cloverdale, and Chico.

These local tax hikes are designed to generate additional revenue for public services, infrastructure, and safety programs—but they also require businesses to act quickly to ensure compliance.

Cities with New Sales Tax Rates in April 2025

Here are some of the notable rate changes:

• Lancaster: 11.25% (up from 10.25%)

• Palmdale: 11.25% (up from 10.25%)

• Cloverdale: 10.00%

• Chico: 9.25%

• Sausalito and Tracy also introduced rate adjustments exceeding 9.5%

  
  

These new rates apply to all taxable sales within city limits, including goods sold by brick-and-mortar stores and online sellers with nexus in these locations.

What This Means for Businesses

If you operate a business in California—or sell to California residents—these updates may impact your pricing, point-of-sale systems, and tax reporting procedures.

1. Update Your Point-of-Sale and E-Commerce Systems

Ensure your POS software reflects the updated tax rates. Failing to charge the correct rate could result in under-collection, creating liabilities during audits.

2. Adjust Your Invoicing and Quoting Tools

Make sure any pricing quotes include the correct local sales tax, especially if you deal with B2B contracts, service-based invoices, or subscriptions.

3. Review Nexus and Compliance Requirements

If you operate outside California but sell into affected jurisdictions, confirm whether your business meets economic nexus thresholds—and whether you're required to collect and remit tax.

How Bizora Helps You Stay Compliant

At Bizora, we help business owners, finance teams, and CPAs stay ahead of local and state tax changes. Our platform helps you:

• Identify jurisdiction-specific rate changes

• Integrate updated rates into your accounting and POS tools

• Avoid penalties and overpayments through accurate reporting

• Coordinate with your CPA on local and state compliance

  
  

Don’t Let Local Tax Changes Catch You Off Guard

Sales tax compliance is more than a state-level issue—especially in California. If your business operates in or sells to cities with new tax rates, now is the time to act.

Visit bizora.ai for tools, guidance, and support to simplify local sales tax compliance and protect your bottom line.