COLUSA, CA (MPG) – Colusa County taxpayers may have escaped a new property tax at the ballot box, but a software tax expansion approved by California lawmakers and signed by Governor Gavin Newsom will bring new costs to most in the new year.
Chief Administrative Officer Joshua Pack said Nov. 3 that the change does not spare county government, adding an estimated $62,000 in expenses this fiscal year and about $180,000 annually in future years.
Pack prepared the Board of Supervisors for the financial impact as departments face growing reliance on digital tools to deliver services effectively to the public.
“And at the same time, the state’s adding a tax to that very service,” Pack said.
Senate Bill 122, authored by the Senate Committee on Budget and Fiscal Review, passed the Senate 27-9 along party lines, with only Democrats voting in favor. The bill expands California’s sales and use tax to prewritten software delivered electronically or accessed remotely. The change takes effect Jan. 1, 2027, reaching qualifying subscriptions and online software used by businesses, residents and public agencies.
The legislation was part of the state’s 2026-27 budget package. It broadens what California considers taxable tangible personal property to include these digital products, extending taxation beyond software supplied on physical media, officials said.
Pack said the state presented the expansion as a way to help address financial pressures associated with federal legislation and other budget needs. Locally, however, the added expense comes without additional revenue to cover costs, he said.
The county controller’s office calculated the projected costs, which Pack said are expected to grow as the county’s software needs increase.
County officials will examine the current fiscal year’s impact during the midyear budget review. Departments will need to account for the ongoing expense when preparing future spending plans, Pack said.
The law does not make every digital purchase by consumers taxable. State tax officials identify exclusions for digital books, music, movies and entertainment video games, as well as certain cloud infrastructure services that allow customers to run their own software.
For Colusa County, Pack described the change as another pressure on the money available to provide services. Although he distinguished it from an unfunded state mandate, he said the county will still have to absorb the cost.
Colusa County taxpayers may have escaped a new property tax at the ballot box, but a software tax expansion approved by California lawmakers and signed by Governor Gavin Newsom will bring new costs to most in the new year.
Chief Administrative Officer Joshua Pack said Nov. 3 that the change does not spare county government, adding an estimated $62,000 in expenses this fiscal year and about $180,000 annually in future years.
Pack prepared the Board of Supervisors for the financial impact as departments face growing reliance on digital tools to deliver services effectively to the public.
“And at the same time, the state’s adding a tax to that very service,” Pack said.
Senate Bill 122, authored by the Senate Committee on Budget and Fiscal Review, passed the Senate 27-9 along party lines, with only Democrats voting in favor. The bill expands California’s sales and use tax to prewritten software delivered electronically or accessed remotely. The change takes effect Jan. 1, 2027, reaching qualifying subscriptions and online software used by businesses, residents and public agencies.
The legislation was part of the state’s 2026-27 budget package. It broadens what California considers taxable tangible personal property to include these digital products, extending taxation beyond software supplied on physical media, officials said.
Pack said the state presented the expansion as a way to help address financial pressures associated with federal legislation and other budget needs. Locally, however, the added expense comes without additional revenue to cover costs, he said.
The county controller’s office calculated the projected costs, which Pack said are expected to grow as the county’s software needs increase.
County officials will examine the current fiscal year’s impact during the midyear budget review. Departments will need to account for the ongoing expense when preparing future spending plans, Pack said.
The law does not make every digital purchase by consumers taxable. State tax officials identify exclusions for digital books, music, movies and entertainment video games, as well as certain cloud infrastructure services that allow customers to run their own software.
For Colusa County, Pack described the change as another pressure on the money available to provide services. Although he distinguished it from an unfunded state mandate, he said the county will still have to absorb the cost.