California will tax downloaded software for the first time as part of a $351.7 billion budget deal
TL;DR
California’s $351.7B budget taxes downloaded software for the first time, raising $2B annually. A ballot measure would let the state save more from AI IPO windfalls.
California Governor Gavin Newsom and top Democratic legislators agreed on a $351.7 billion state budget that will extend sales tax to prewritten software downloaded from the web. The tax is expected to raise $900 million for the state and another $1.1 billion for local governments starting in fiscal year 2028 and annually thereafter, according to Bloomberg.
The change applies to software that was previously only taxed when purchased on a physical disc. “Most of us don’t get prewritten software on a physical disc anymore. The whole world is past that, our tax code isn’t,” said state Senator John Laird during a legislative debate on June 18.
Republicans argued the measure raises costs for businesses that rely on software ranging from basic...
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