Recently proposed legislation would require sellers to collect sales and use tax on the sales price of certain services to California businesses.
On Feb. 5, 2018, California Senator Robert Hertzberg introduced a bill, which if enacted, would impose sales and use tax on purchases of services by businesses for benefit and use in California, effective Jan. 1, 2019. For services that benefit or are used by the purchaser’s California and non-California operations, a share of the services would be apportioned to California. The proposed tax rate has not yet been determined. Notably, the tax would not apply to purchases of services by individuals.