# California Legislature Enacts $14.3B Tax Measures

A California Tax Foundation report estimates that tax and fee measures enacted during the 2025–2026 legislative session will add $14.3 billion in annual costs for California businesses and residents. Expanded sales taxes on digital software, restrictions on business tax credits, and a renewed levy on health plans account for about 80% of the projected increase. The report identifies no specific procurement opportunity, but the measures may affect contractors’ operating costs and pricing assumptions.

- Businesses selling or purchasing digital software in California should assess how the expanded sales tax applies to their transactions.
- Contractors should account for potentially reduced business tax credits and higher health-plan costs when updating California cost estimates and budgets.
- The report’s figures are estimates of statewide annual costs; it does not specify individual contractor impacts or contract-level changes.

**Jurisdictions:** sled
**Topics:** Policy
**Published:** October 14, 2026

### Government Entities
- California State Legislature