Yes — it was signed into law on June 29, 2026, and takes effect Jan. 1, 2027.

No. Two gates. First, only prewritten software and SaaS (not custom software, not IaaS). Second, only if you have California nexus, which is $500,000 in California sales (economic nexus) OR a physical office, warehouse, employee etc (physical nexus). Below the threshold with no physical presence, you have no California collection obligation.

Prewritten means sold the same way to many customers (most SaaS). Custom means built for one client, and it stays exempt. Modifications to prewritten software are exempt only for the custom portion. Anrok’s tax team can help with general questions and common edge cases, but choosing how to tax your products (including selecting product tax categories) is best handled with your tax advisor.

California's combined rate at the buyer's location: 7.25% state plus local district tax, sourced to the buyer's California address (billing first, then shipping, then the address on the payment instrument, then any other address on file).

A buyer purchasing more than $5 million a year of digital products from a single seller remits the tax directly to CDTFA instead of paying it to that seller. The liability shifts on the transaction that crosses the threshold. This becomes a use tax obligation for the buyer and typically requires the buyer to register with CDTFA. For 2027, the threshold is a calendar-year test; from 2028, it looks to the prior or current year. It matters for large enterprise buyers and the vendors selling to them.