California Rules for Tax on Items With Software Taking Shape

California’s sales tax department is ready to move beyond informal discussions with business groups as it develops long-awaited rules for products like machinery and electronic devices that pair nontaxable software with tangible, taxable items.

At a third informal workshop on the topic in less than a year, Director Nicolas Maduros said Monday the California Department of Tax and Fee Administration is still working out details to make the rules easy for the state and taxpayers to administer. But the department will move to a formal interested parties process in early 2025 that includes draft regulations.

The regulations would cover technology ...