On Wednesday, Chamber of Progress released new research examining the impact of a proposed digital ad tax in California (SB 1327) that would levy a 7.25% tax on online advertising. Authored by Senior Economist Kaitlyn Harger, the research finds that over a quarter million California businesses rely on online advertising and that an average local business advertising across Google, Meta, and Amazon could see ad costs spike by $14,000 annually under SB 1327, sponsored by Sen. Steve Glazer.

Read the full study: California’s New Online Advertising Tax Would Cost The Average Business as Much as $14,000 Annually

“This bill is aimed at big tech, but it’s going to end up hitting California businesses that rely on advertising to reach consumers,” said Chamber of Progress CEO Adam Kovacevich. “Supporting newspapers is a great idea, but it shouldn’t come at the cost of higher prices for California businesses trying to thrive.

Top findings from the research on California’s online ad tax proposal include:

• Based on extrapolating public data, there are an estimated 226,000 California businesses advertising on Google, another 156,000 on Meta, and 44,000 on Amazon.
• If online platforms passed 100% of the cost of SB 1327 on to local businesses, an average California company advertising on Google, Meta, and Amazon would face as much as $14,000 in additional ad costs.
• If online platforms passed 75% of the cost of a new ad tax on to advertisers, local businesses advertising across these three platforms would face $10,000 in increased ad costs annually.