- California’s 2026–2027 budget proposal would expand sales and use tax to many digital products delivered physically, digitally, or via cloud access, including prewritten software and SaaS.
- The proposal treats delivery method as irrelevant to sales tax applicability.
- If enacted, the new rules would start on January 1, 2027, for supplies to California residents.
- Current tax mainly applies to software on tangible media, but the proposal would extend it to most prewritten software regardless of delivery method.
- Custom software would remain exempt, and many affected transactions are expected to be B2B sales.
Source: 1stopvat.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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