Overview
- Newsom, who unveiled the plan Thursday, asked lawmakers to apply sales tax to prewritten digital software and many software-as-a-service subscriptions starting January 1, 2027.
- His office estimates $450 million for the state general fund and $560 million for local governments in the current budget year, rising to about $900 million and $1.1 billion in later years.
- The administration says roughly three out of four affected transactions are business-to-business, and it excludes entertainment streaming services such as Netflix and Spotify.
- Products named in coverage include Microsoft 365, Adobe Creative Cloud, QuickBooks Online, Slack, and Workday, which could raise software bills for companies and some subscribers in California.
- California already taxes boxed software bought in stores but not most downloads, and supporters say the change would align the state with dozens of others that tax digital software or SaaS.