Plain English Breakdown
The specific percentage rate for the tax is not defined in the provided source material.
Tax on Social Media Advertising
This law creates a temporary tax starting in 2026 and ending before 2031 on money social media companies earn from selling programmatic ads, placing the funds into a trust for education, mental health, research, and social services.
What This Bill Does
- Imposes a new tax on social media platform providers for taxable years beginning between January 1, 2026, and before January 1, 2031.
- Calculates the tax as an unspecified percentage of annual gross receipts from programmatic advertising sold for distribution on the provider's platform.
- Requires the California Department of Tax and Fee Administration to collect the tax under existing fee laws, noting that violations are crimes.
- Creates the Social Media Safety Trust Fund within the State Treasury to hold all money collected.
- Establishes four accounts within the fund: Education Account, Mental Health Care Account, Research and Development Account, and Social Services Account.
Who It Names or Affects
- Social media platform providers that sell programmatic advertising on their platforms.
- The California Department of Tax and Fee Administration responsible for administering the tax.
- State programs receiving funding from the new trust fund accounts.
Terms To Know
- Social media platform provider
- A company defined by law that operates a social media platform where programmatic advertising is distributed.
- Programmatic advertising
- The purchase of advertisements for distribution on a social media platform, which serves as the basis for this tax.
- Social Media Safety Trust Fund
- A new state fund created to hold tax money and allocate it into specific accounts for education, mental health, research, and social services.
Limits and Unknowns
- The exact percentage of the tax is not specified in this text.
- The law automatically repeals itself on January 1, 2031.
- This bill states that no reimbursement to local agencies or school districts is required for costs mandated by this act.