1. United States
2. Calif.
3. Letter

Vote no on Governor Newsom's proposal to extend California's sales tax to digital prewritten software and SaaS products. Taxing the software tools that businesses rely on every day is the wrong move, and the legislature should reject it before it reaches a vote. Roughly 75% of the transactions this tax would hit are business-to-business. That means the real burden falls on California companies — startups, small businesses, nonprofits — that use these tools to operate. A 7.25% tax on software subscriptions isn't a minor inconvenience; it's a recurring cost increase that will push businesses to reconsider whether California is worth the overhead. We're already watching the tech sector take hits from the "SaaSpocalypse" sell-off. Piling on a new tax now sends exactly the wrong signal. The $900 million annual revenue projection doesn't justify the damage to California's reputation as a place where technology companies want to grow. Closing a tax "inequity" by dragging digital services down to the level of outdated retail tax rules is not progress. Kill this proposal.