AB 796 California Assembly · 2025-2026 Regular Session

Social media platforms: advertising: tax.

Summary

Existing law imposes various taxes, including a tax on income, the gross receipts from the sale of tangible personal property, and real property. This bill would impose a tax on a social media platform provider, as defined, equal to an unspecified percentage of the annual gross receipts derived from the purchase of programmatic advertising for distribution on the provider's social media platform, as provided. The bill would require the California Department of Tax and Fee Administration to administer the tax pursuant to the Fee Collection Procedures Law, the violation of which is a crime. By extending the application of the Fee Collection Procedures Law, this bill would impose a state-mandated local program. This bill would create the Social Media Safety Trust Fund within the State Treasury and would require all moneys raised pursuant to these taxes be deposited into the fund. The bill would establish various accounts within the fund and would allocate moneys into those accounts for expenditure according to specified purposes, including an Education Account, Mental Health Care Account, Research and Development Account, and Social Services Account. The bill would continuously appropriate the moneys in the fund to administer those provisions. 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.

Issues: ✓ Budget & Taxes

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 18, 2025 Last action Feb 2, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

01/05/26 - Amended Assembly → AB796 · 3 edits

MINOR

The changes between the January 5, 2026 amended assembly version and the final published AB796 text are primarily technical and organizational. The most notable substantive addition is a new definition of 'Department' in Section 51000 of the Revenue and Taxation Code, clarifying that it refers to the California Department of Tax and Fee Administration. The remaining differences are formatting changes reflecting the transition from a legislative document format to a web-published version.

DEFINITION

A new definition was added in Section 51000: '(a) Department means the California Department of Tax and Fee Administration.' This clarifies which agency is responsible for administering and collecting the social media platform advertising tax.

TECHNICAL

The 'Advertisement' definition in Section 51000 was reorganized in its placement relative to other definitions, though the substantive content of the definition itself remains unchanged.

Formatting and presentation changes throughout the document reflect the transition from a line-numbered legislative draft format to a web-published bill text format, including changes to section numbering display and header structure.

03/28/25 - Amended Assembly → 01/05/26 - Amended Assembly · 7 edits · Jan 5, 2026

MODERATE

The January 2026 amendment significantly narrows the tax base by limiting it to 'programmatic advertising' rather than all social media advertisements, adds a new definition for that term, and removes an unrelated property tax provision. It also adds a requirement that the tax be administered under the Fee Collection Procedures Law (making violations criminal), includes a data privacy protection clause, expands the Social Services Account to cover community-based youth programs, and designates the bill as creating a state-mandated local program.

Scope change

The tax base is narrowed from all social media advertising to only 'programmatic advertising' (algorithmically targeted, real-time automated ad purchases). An unrelated property tax amendment was removed. The bill now also creates a state-mandated local program through its use of the Fee Collection Procedures Law for enforcement.

SCOPE

The tax now applies only to 'programmatic advertising' rather than all advertisements on social media platforms. A new definition requires the method to use technology for real-time automated purchasing, serve targeted cross-channel experiences, and use algorithms filtering impressions from consumer behavioral data.

The unrelated amendment to Section 105 of the Revenue and Taxation Code (defining 'improvements' for property tax purposes) has been entirely removed from the bill.

ENFORCEMENT

A new section requires the California Department of Tax and Fee Administration to administer and collect the tax pursuant to the Fee Collection Procedures Law, which makes violations a crime. This also designates the bill as creating a state-mandated local program.

REQUIREMENT

A new provision (Section 51009) states that the act does not grant or alter any authority related to the collection, access, or use of any information associated with a user or their geolocation.

FISCAL

The Social Services Account now explicitly includes funds to support community-based organizations providing youth behavioral health primary prevention services and after school programs aimed at reducing risks of adolescent social media use.

DEFINITION

A new definition of 'Department' (meaning the California Department of Tax and Fee Administration) is added, and a new definition of 'programmatic advertising' is inserted into the Revenue and Taxation Code section.

TECHNICAL

Multiple sections have been renumbered throughout both the Business and Professions Code and Revenue and Taxation Code divisions (e.g., 29010 to 29001, 29100 to 29005, 51010 to 51001, 51100 to 51005), reflecting a reorganization of the code structure.

02/18/25 - Introduced → 03/28/25 - Amended Assembly · 9 edits · Mar 28, 2025

MAJOR

The bill was dramatically expanded from a minor nonsubstantive cleanup of the property tax definition of 'improvements' into a comprehensive new tax on social media platform advertising revenue, paired with a dedicated trust fund to address harms to minors caused by social media use. The amendment adds an entirely new division to the Business and Professions Code and a new part to the Revenue and Taxation Code, while relegating the original property tax language change to the final section.

Scope change

The bill's scope expanded from a single nonsubstantive amendment to a property tax definition (Section 105 of the Revenue and Taxation Code) to a sweeping new tax regime on social media advertising revenue with a dedicated trust fund for youth safety programs, spanning two separate code divisions and applying to all qualifying social media platform providers with California users.

SCOPE

The bill now imposes a tax on social media platform providers equal to an unspecified percentage of annual gross receipts from advertising purchases, for taxable years beginning on or after January 1, 2026 and before January 1, 2031.

The bill's title and legislative counsel digest were expanded to cover both the property tax definition change and the new social media advertising tax and trust fund provisions.

DEFINITION

Defines 'social media platform' as a public or semipublic internet-based service with California users that connects users for social interaction and allows users to create profiles, maintain connection lists, and post content. Email or direct messaging alone does not qualify.

ELIGIBILITY

Exempts purchases by 501(c)(3) nonprofit organizations and purchasers whose aggregate annual ad payments to a provider do not exceed $100,000.

FISCAL

Creates the Social Media Safety Trust Fund within the State Treasury with four accounts (Education, Mental Health Care, Research and Development, and Social Services), each with an unspecified percentage allocation. The fund is continuously appropriated without regard to fiscal year.

REQUIREMENT

Requires that all tax revenues be deposited into the trust fund and used only for new services or to supplement existing levels of service, not to supplant state General Fund money.

Vote requirement changed from majority to two-thirds, and both appropriation and fiscal committee designations changed from 'no' to 'yes'.

TIMELINE

The entire social media tax and trust fund structure sunsets on January 1, 2031, at which point both the Business and Professions Code division and the Revenue and Taxation Code part are repealed.

TECHNICAL

Adds legislative findings asserting state taxation authority under the Tenth Amendment, describing social media harms to minors (cyberbullying, trafficking, self-harm, etc.), and arguing the tax is a neutral service-specific sales tax rather than discriminatory internet regulation.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Feb 2, 2026

Lower · Passed

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

lower

Jan 12, 2026

Lower · Passed

In committee: Held under submission.

lower

Jan 12, 2026

Committee

In committee: Set, second hearing. Referred to REV. & TAX. suspense file.

lower

Jan 6, 2026

Committee

Re-referred to Com. on REV. & TAX.

lower

Jan 5, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

lower

Apr 28, 2025

Lower · Passed

In committee: Set, first hearing. Hearing canceled at the request of author.

lower

Apr 23, 2025

Lower · Passed

From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 8. Noes 4.) (April 22). Re-referred to Com. on REV. & TAX.

lower

Apr 1, 2025

Committee

Re-referred to Com. on P. & C.P.

lower

Mar 28, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on P. & C.P. Read second time and amended.

lower

Mar 28, 2025

Committee

Referred to Coms. on P. & C.P. and REV. & TAX.

lower

Feb 19, 2025

Lower · Passed

From printer. May be heard in committee March 21.

lower

1 primary · 0 co-sponsors