BSA Urges California Lawmakers to Reject Software Taxes and Protect Innovation Incentives

The Business Software Alliance urges California lawmakers to reject proposed taxes on software-as-a-service (SaaS) and limitations on the use of research and development tax credits that could discourage investment in AI, cloud services, and cybersecurity tools that serve every part of the state's economy. At a time when policymakers should be encouraging innovation and technology adoption, these proposals would increase costs for businesses, schools and consumers that rely on software every day. California's economic leadership has long been built on innovation, and taxing software and digital products while limiting the R&D tax credit sends the wrong signal at the wrong time, especially when California can address its budget challenges without increasing costs on the innovation economy that drives jobs, investment, and growth.