Bill > AB796

This bill proposes to establish a new tax on social media platform providers, defined as entities providing internet-based services with users in California that allow social interaction, profile creation, and content posting, for programmatic advertising purchased for distribution on their platforms. This tax, which will be in effect from January 1, 2026, to January 1, 2031, will be an unspecified percentage of the annual gross receipts derived from such advertising, with specific provisions for calculating taxable gross receipts to include only those originating in or distributed to California residents, excluding refunds and certain purchases by non-profits or small advertisers. The revenue generated from this tax will be deposited into a newly created Social Media Safety Trust Fund, which will be continuously appropriated to administer the provisions and will be allocated to separate accounts for education, mental health care, research and development, and social services, aiming to mitigate harms associated with adolescent social media use. The California Department of Tax and Fee Administration will administer this tax under existing fee collection procedures, and the bill clarifies that it does not infringe upon free expression rights.

Budget and Finance, Business and Industry

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB796