Sensiba LLP

Hot off the presses. California Air Resources Board hosted a public workshop today with key updates regarding SB 253: Climate Corporate Data Accountability Act. Feel free to reach out if you’d like to discuss any of these updates or need support with organizational GHG emissions reporting, disclosure or assurance. Sensiba LLP has you covered! Reporting Deadline for 2026 Pushed Back – CARB has proposed adopting a new 2026 Scope 1 and 2 emissions reporting deadline of November 10, 2026. Additional details on this deferral can be found via CARB’s June 24, 2026 notice here. CARB staff will share additional guidance materials to support 2026 Scope 1 and 2 emissions reporting by September 1, 2026, including a voluntary online intake form and accompanying guidance. Subsequent reporting deadlines will remain November 10th for 2027 and beyond. Inclusion of Biogenic Emissions Reporting – Emissions from the combustion, consumption, or biodegradation of biomass and biomethane must be included in GHG emissions reports and shall be reported separately from Scope 1-3 emissions. Prioritization of Primary Data – In alignment with the GHGP, CARB recommends the prioritization of primary data (usage actuals) over secondary data (estimates or modeling). Scope 2 Emissions Reporting – Reporting entities shall disclose Scope 2 GHG emissions expressed in MTCO2e by source type, including electricity, steam, heating and cooling emissions, and shall be calculated and reported using BOTH market- and location-based methods. Limited Scope 3 Reporting – In acknowledgement that assessing all 15 Scope 3 categories in 2027 could pose data availability and cost challenges, CARB proposed requiring reporting on only the five (5) most commonly-reported categories, which include: Category 1 (Purchased Goods and Services), Category 3 (Fuel and Energy Related Activities), Category 5 (Waste Generated During Operations), Category 6 (Business Travel), and Category 7 (Employee Commuting) beginning in 2027.   Insurance Company Applicability – While the initial regulation exempted insurance companies to avoid duplication with parallel reporting required by the California Department of Insurance, CARB Staff identified that CDI reporting doesn’t satisfy the SB 253 requirements because it does not include Scope 3 or assurance requirements. As such, beginning in 2027, CARB proposes that insurance entities may submit the same report to satisfy both CDI and SB 253 requirements, which includes requiring SB 253 aligned Scope 1-3 disclosures and assurance. Assurance Requirements – CARB is maintaining SB 253’s requirement for third-party limited assurance over Scope 1 and 2 disclosures beginning with reports submitted in 2027, including separately reported biogenic emissions. The proposed assurance standards include: 1) AA1000 2) AICPA AT-C Section 210 3) ISAE 3410 / ISSA 5000 4) ISO 14064-3:2019.

‼️Important update for CA and CO for SaaS providers and buyers‼️ Effective 1/1/2027, both states will apply sales and use tax to SaaS and remotely accessed software. It is worth noting that the mechanics differ between the states, but they arrive at the same effective result. • CA (SB 122): Prewritten software, including SaaS, will be taxable as tangible personal property regardless of delivery method. • CO (HB 26-1223): Repeals the exemption for cloud-based and downloaded software, bringing SaaS into the sales tax base. If you are buying or selling SaaS or cloud products in these states, now's the time to revisit nexus, registration status, and sourcing methodology ahead of the 1/1/2027 effective date. Reach out if you need help planning for the impact of these changes.

Congratulations to this year's NorCal Accounting Awards honorees, presented in partnership with San Francisco Business Times. The group includes Next Gen in Accounting winner Chelsie Rabon (Withum) and accounting firm honorees Baker Tilly US, Hood & Strong LLP, BDO USA, Deloitte and SD Mayer. Thank you to Whitman Advisory (Jason McKeever) and Paychex (Shirley Mesias-Interiano) for sponsoring the night. #Top50Accountants #AccountingAwards #AccountingProfession #NorCal #CalCPA