(KMJ) Governor Gavin Newsom is proposing the largest budget in state history—totaling nearly $350 billion—and it includes a new tax that could impact businesses across the state.
The plan would apply California’s 7.25 % sales tax to cloud-based software, something that’s currently not taxed the same way as physical software purchases.
That means products like Microsoft Office, Adobe, QuickBooks, and Workday could soon carry a sales tax for users.
Newsom says the move could generate an estimated $1.1 billion in its first year—growing to roughly $2 billion annually after that.
Critics were quick to sound the alarm.
If approved, the new tax would take effect January 1st, 2027.
