Overview
- The governor signed the budget in June 2026 and both tax changes are scheduled to take effect in 2027.
- The plan expands a tax on health‑care providers designed to raise roughly $2 billion a year to support Medi‑Cal, a move state analysts say may require federal review.
- Legislative analysts estimate treating downloaded “prewritten” software as taxable personal property will bring about $900 million a year, though private groups offer much higher figures.
- Insurers and business groups warn some or all of the provider tax will be passed to customers, with published estimates near $100 per person or $400 for a family of four in higher premiums.
- Key open questions include federal (CMS) approvals, how the state will define and enforce the software exemption for custom work, and how auditors might determine where software is primarily used, all of which will shape who ultimately pays.