Digital Advertising Services Tax Law.

Existing law imposes taxes upon income and real property, and taxes upon certain transactions and excise taxes. The Fee Collection Procedures Law provides procedures for the collection of certain fees and surcharges and is administered by the California Department of Tax and Fee Administration. Under existing law, a violation of the Fee Collection Procedures Law is a crime. This bill would, beginning January 1, 2025, require a person with at least $100,000,000 in annual gross revenues, as defined, to pay a tax on annual gross revenues that are derived from digital advertising services in the state at a specified rate. The bill would prohibit a taxpayer from directly passing on the cost of the tax to a customer. The bill would state the intent of the Legislature that the net proceeds from the tax would be used to fund youth mental health services. The bill would require the department to administer and collect the tax pursuant to the Fee Collection Procedures Law. By expanding the application of the crimes associated with the Fee Collection Procedures Law, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. This bill would take effect immediately as a tax levy.