California SB 122: Sales Tax on enQ's Software Platform Begins January 1, 2027

Starting January 1, 2027, enQ will be required to collect California sales tax on software-as-a-service (“SaaS”). If your enQ account has a California Service Address, the Software platform portion of your charges will be taxed at the 7.25% statewide rate plus any local district taxes where you’re located. As of this writing, that’s a combined rate of 7.25% to 11.25%. The tax will appear as a separate line on your invoice.

For example, on a $300 monthly plan, about $285 is the Software platform portion. The new tax would be roughly $21 to $32 per month, depending on your location.

What changed

Senate Bill 122 amends the Revenue and Taxation Code to tax prewritten software however it is delivered: on physical media, by download, or accessed remotely. For decades, California taxed software only when it was delivered on a physical medium, such as a disk. SB 122 extends the sales and use tax to remotely accessed software (SaaS).

How it affects your invoice

• Who: customers with a California Service Address. Tax is based on the Service Address on your account, not the billing address of your payment method. Sales sourced outside California are not affected.
• When: invoices dated on or after January 1, 2027.
• What is taxed: the Software platform (SaaS) portion of your charges, including subscription, usage, and related fees.
• What is not taxed: the Voice service (VoIP) portion. It is not subject to this tax, and its existing surcharges are unchanged.

For how enQ charges are itemized and taxed, see our Tax & Fee Disclosure.

This post is general information, not tax advice for your specific situation. Primary sources: Senate Bill No. 122 (2025–2026); CommLaw Group, California Changes the Tax Equation for Cloud Communications.