← CA SB 122 tool

SB 122 sourcing: which address sets your California rate?

California uses a destination-based, purchaser-address hierarchy for remote software/SaaS sales. SB 122 does not let you allocate by where the software is actually used. The order:

1. In-person sale at your CA place of business → that CA location's rate
2. Remote, purchaser has a known CA address (use in order): billing address → shipping/delivery address → payment-instrument mailing address → most recent mailing address
3. No CA address identified → outside California → not CA-taxable

The billing-address lever

A subscription billed to a CA address is taxed; the same subscription billed out of state generally isn't. Clean, validated billing-address data is your biggest control — and your biggest compliance exposure if wrong. Collect and validate it at checkout.

Combined rate ≈ 7.25% state + district (commonly ~10.25–10.75%). Use the CDTFA rate finder for the exact per-address rate.

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