For Immediate Release, August 27, 2026
Contact: David Kline (916) 893-2614 or [email protected]
SACRAMENTO – State lawmakers considered increasing Californians’ annual taxes and fees more than $803 billion during the two-year legislative session scheduled to adjourn Monday, the California Tax Foundation reported today.
The foundation’s Tax and Fee Report documents 156 proposals for tax or fee increases, including 35 that were approved by the Legislature and signed into law by Governor Gavin Newsom earlier this year. The two largest approved taxes are Newsom’s proposals that were included in the 2026-27 state budget:
- SB 122 (Senate Budget and Fiscal Review Committee), which imposes a tax on sales of digital prewritten software, regardless of how the product is delivered to the purchaser (including Software as a Service, where the customer accesses the software hosted by the vendor but never takes possession of it); and also increases taxes on California employers by limiting the usage of business tax credits. The tax increases are projected to cost taxpayers at least $9.17 billion per year.
- SB 125 (Senate Budget and Fiscal Review Committee), which imposes a tax on health plans, estimated to cost Californians $2.3 billion per year.
“Lawmakers announced at the beginning of the session that they would focus on making California more affordable, then approved many tax and fee increases that add to residents’ costs,” California Tax Foundation Research Analyst Caitlin Herring said. “While many tax and fee measures stalled, several costly proposals remain alive as the Legislature enters its final days of the session.”
Of the 156 measures that proposed a new tax or fee, the projected cost to taxpayers can be quantified for 48, while fiscal estimates for the remaining 108 measures are not available.
Bills proposing fines or penalties for violating state or local laws are not included in the report, nor are state and local ballot measures (like the proposed wealth tax and extension of a “temporary” personal income tax increase) that don’t require any legislative action.
The Tax and Fee Report is a regular publication of the California Tax Foundation, updated throughout the year to reflect new legislative proposals. The report includes any measure estimated to cost $1 million or more per year in higher taxes or fees.
The California Tax Foundation, a nonprofit organization founded in 1980, improves public policy through independent, nonpartisan research.