FAQ

When does it start?

January 1, 2027. (L-1036)

Is SaaS taxable?

Prewritten SaaS is a digital product. The "service" exemption specifically excludes SaaS.

Is cloud hosting/IaaS taxable?

Digital infrastructure, meaning cloud platforms where customers create, deploy, or run their own applications, is listed as not a digital product.

Is custom software taxable?

Custom computer software is listed as exempt. Software held for repeated sale is "prewritten," even if it started as custom.

Are ebooks, music, video, or games taxable under this law?

Those are listed as not digital products.

I'm outside California. Do I need to register?

If you're "engaged in business" in California under §6203, yes: a Certificate of Registration–Use Tax. Check with a CPA.

Which tax rate applies?

For electronic or remote delivery, the place of sale is generally the customer's address, so local and district rates follow the customer.

Where can I get an official answer?

Request written advice from CDTFA, or call 1-800-400-7115.

General information, not tax advice. This site summarizes public CDTFA guidance on Senate Bill 122 (Stats. 2026, ch. 23). It is not legal or tax advice, and it does not replace the law or CDTFA regulations. For your specific situation, consult a CPA or tax attorney, and consider asking CDTFA for written advice. Written advice can protect you, but phone advice cannot.