SB 176: Taxation.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

(1)Existing state sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state of, or on the storage, use, or other consumption in this state of, tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law (SUT) defines “tangible personal property” to mean personal property that may be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. Existing law punishes various violations of the SUT as crimes.

The Bradley-Burns Uniform Local Sales and Use Tax Law (Bradley-Burns) authorizes counties and cities to impose local sales and use taxes in conformity with the SUT, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the SUT. Amendments to the SUT are automatically incorporated into the local tax laws.

This bill would define “tangible personal property” to additionally mean a digital product and any copyright or patent interests associated therewith for the purposes of the application of the SUT, as prescribed. The bill would define “digital product” to mean, except as provided, prewritten computer software transferred on tangible storage media, transferred electronically, or accessed remotely. The bill would also make various conforming changes. By expanding the scope of violating the SUT, this bill would impose a state-mandated local program.

This bill would prohibit a purchaser or retailer of a digital product that is transferred electronically or accessed remotely from entering into any form of agreement that would result, directly or indirectly, in the payment, transfer, diversion, or rebate of any tax revenue resulting from the imposition of a sales and use tax under Bradley-Burns imposed on the sale or purchase of a digital product that is transferred electronically or accessed remotely.

This bill would make an appropriation of $750,000 from the General Fund to the California Department of Tax and Fee Administration for the purpose of administering these sales and use tax provisions.

(2)The Personal Income Tax Law and the Corporation Tax Law authorize various credits against the taxes imposed by those laws. Existing law, for taxable years beginning on or after January 1, 2024, and before January 1, 2027, limits the total tax reduction by all business credits, as defined, to $5,000,000 per taxable year, except as specified.

Sponsors

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. June 12, 2026From committee with author's amendments. Read second time and amended. Re-referred to Com. on BUDGET.
2. March 24, 2025Referred to Com. on BUDGET.
3. March 20, 2025In Assembly. Read first time. Held at Desk.
4. March 20, 2025Read third time. Passed. (Ayes 28. Noes 10. Page 455.) Ordered to the Assembly.
5. March 18, 2025Read second time. Ordered to third reading.
6. March 17, 2025Ordered to second reading.
7. March 17, 2025Withdrawn from committee. (Ayes 27. Noes 10. Page 384.)
8. February 5, 2025Referred to Com. on B. & F. R.
9. January 24, 2025From printer. May be acted upon on or after February 23.
10. January 23, 2025Introduced. Read first time. To Com. on RLS. for assignment. To print.