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California tax revenue getting a boost from AI boom — but for how long?
Stock-option tax withholding from major tech firms accounted for about 10% of California's income tax withholding in 2025 amid stagnant tech job growth.
- Last year, the Legislative Analyst's Office found the state is seeing revenue benefits from stock-option withholding by Nvidia, Google, Broadcom, Intel, Cisco, AMD, Paypal, Applied Materials and Qualcomm, making up about 10% of income-tax withholding in 2025.
- Because vested options count as ordinary income, rising share prices at Nvidia, Broadcom and Google lifted option-related payouts, prompting withholding gains for stock-option-holding employees.
- Analyses of employment data show California lost more than 130,000 high-tech jobs last year, while Bay Area tech employment fell 1.3% in information and 1.5% in professional services.
- Facing a nearly $18 billion deficit this year, California relies on personal income tax as its largest revenue source, making option withholding gains crucial for state budget planners.
- Some analysts say this is Year 3 of an AI buildout, warning of classic bubble signs and data centers’ energy strains that could threaten revenue gains.
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14 Articles
14 Articles
Associated Press News+13 Reposted by 13 other sources
California tax revenue getting a boost from AI boom -- but for how long?
As California becomes more dependent on tax revenue from the tech industry, its stake in the health of the artificial intelligence industry has grown.
·United States
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Total News Sources14
Leaning Left4Leaning Right1Center4Last UpdatedBias Distribution45% Left, 44% Center
Bias Distribution
- 45% of the sources lean Left, 44% of the sources are Center
45% Left
L 45%
C 44%
11%
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