Yes, you need to pay sales tax on clothes you sell. In California, you will need a Seller's Permit from the State Board of Equalization to sell tangible personal property (which includes clothing).
Although you are required to pay and report sales tax to the Board of Equalization, you may be reimbursed by your customer for the amount of tax you owe on a sale. For example, if you are required to pay $1.75 in sales tax on a sale, you may pass that cost on to your customer, provided it is agreed to as part of the sale. Sales tax rates vary depending on your city and county. See the link below for more information on tax rates.
You can learn more about sales tax in Publication 73 from the State Board of Equalization's website or by calling their General Information line at 800-400-7115. Consider speaking with a qualified business or tax attorney before starting your clothing company, since a failure to properly report and pay taxes will result in penalties and interest in the long run.
Robert Hoffman is a tax attorney licensed in California. The information presented here is general in nature and is not intended as a substitute for legal advice. This posting does not create any attorney-client relationship with the author. For competent advice about your particular situation, consult your own attorney.
You are responsible for collecting sales tax from your customers (or proper documentation if the sale is somehow exempt). If you do not collect the tax (or be able to prove it was an exempt sale), then your company becomes liable for the sales tax.
Get registered with the state to collect and remit tax. Read up on your obligations. Take it very seriously. You can get in a LOT of trouble for sales tax issues.
Good luck with your business.