Newsom’s Software Tax Is a Bad Idea Based on an Outdated Anecdote
The proposal would raise $1.1 billion in state and local revenue next year, Newsom’s office said, as California seeks new budget money.
- On Thursday, California Governor Gavin Newsom proposed expanding the state's 7.25% sales tax to include digital prewritten software, aiming to create a level playing field between online downloads and retail purchases.
- Newsom, who noted he frequently shops at Best Buy, argued it is unfair for consumers to pay sales tax on in-store software while online counterparts avoid the levy; the proposal becomes effective January 1, 2027.
- Large software vendors such as Microsoft Corp., Salesforce Inc. and Oracle Corp. would be affected by the tax, which the administration projects will raise $850 million in 2026-27 and $1.7 billion in 2027-28.
- Urging caution, the California Chamber of Commerce asked lawmakers to delay new taxes until current policy debates settle, noting the proposal is part of a revised $350 billion budget that eliminates the state deficit.
- Citing expectations of a stock-market correction, the Legislative Analyst's Office cautioned last week that California should treat increased tax collections as temporary, given the state's budget sensitivity to revenue volatility.
15 Articles
15 Articles
Critics Slam Newsom’s Digital Software Tax as “Outdated” Idea
(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 use…
Gavin Newsom Pushes Massive New Tax Expansion Targeting Software And AI Services - Real News Now
California Gov. Gavin Newsom is pushing a major expansion of the state’s sales tax system that would apply new taxes to cloud software, AI platforms, and digital business applications used by millions of consumers and companies. The proposal would extend California’s existing sales tax rules to cover many forms of digitally delivered software and Software-as-a-Service products, potentially reshaping how the tech industry operates in the nation’s…
Newsom’s floated software tax misses the mark
In Silicon Valley, the software industry is being disrupted, as people with zero experience now vibe code from the comfort of their own homes.California Gov. Gavin Newsom doesn’t appear to be partaking in this revolution. He’s still “at Best Buy often,” he said at a press conference Thursday about a new digital software tax. “I’m paying sales tax on a lot of this prewritten software. And then I find out that all my friends that aren’t near a Bes…
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