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Tag: Tax Strategy
California Gross Premiums Tax on AI InsurTech Startups
As AI-powered InsurTech startups continue to scale across California, many are entering regulated insurance business models issuing digital policies, underwriting risk through licensed carriers, or acting as MGAs. But one California-specific tax often gets missed in early planning: the Gross Premiums Tax (GPT) under California Constitution Article XIII, Section 28. Unlike income tax, this tax […]
Stock-for-Stock Reorgs: California Franchise Tax Surprises
When your startup undergoes a stock-for-stock reorganization, the focus is usually on federal tax deferral under IRC §368(a)(1)(B) but if your company operates in California, the Franchise Tax Board (FTB) may have a different take. Many founders, CFOs, and legal teams overlook the state-level tax implications of stock swaps, especially when: Entities involved are incorporated […]
Public Utility Tax on SaaS Subscriptions: Does It Apply in California?
As more SaaS startups scale in California, founders are facing unexpected tax classifications especially when their platforms involve communications, data transmission, or streaming. One area drawing scrutiny is whether SaaS services are subject to Public Utility Tax (PUT) under California’s rules or local ordinances. Although California doesn’t impose a state-level sales tax on most SaaS […]
Manufacturers’ Sales Tax Exemption for Robotics Startups
Introduction California’s partial sales and use tax exemption for manufacturers can be a game-changer especially for robotics startups purchasing high-tech equipment. In this 2025 guide, we explain how eligible businesses can save up to 3.9375% in state-level sales tax, and how to apply it to robotics, AI, and automation equipment. Relevant Tax Code and Regulations […]
Payroll R&D Credit: Why the CA Program Is Capped
Introduction Startups across the U.S. leverage the federal payroll R&D credit to offset up to $500,000 in employer-side payroll taxes. But what about California? In 2025, California still does not allow R&D credits to offset payroll tax, and its overall research credit program is non-refundable and capped for corporations. This guide explains why CA R&D […]
Why California Has Some of the Highest Taxes in the U.S. (2025 Edition)
Introduction California’s economy is the largest in the nation, but it also comes with one of the highest state tax burdens. From income to sales and property taxes, residents and businesses often ask: Why are taxes so high in California? This blog explains the structural reasons, what you pay in 2025, and how to plan […]