On May 29, 2025, the California Air Resources Board delivered a presentation that provided additional details concerning the soon-to-be implemented mandatory climate disclosures. Perhaps most significantly, the California regulator gave additional guidance on which companies will be subject to the law. Specifically, the California Air Resources Board stated that they planned to rely upon the tax code's interpretation of "doing business in California" to determine whether a company needed to make the regulatory disclosure. So, in practical terms, this means that sales in California of $735,019 or more, or owning real property in California worth more than $73,502 or paying employees in California more than $73,502, would constitute "doing business in California" for purposes of complying with the mandatory climate disclosure (subject to the other statutory requirements--e.g., meeting the revenue threshold of either $1 billion or $500 million, depending upon the type of disclosure).
Additionally, the California Air Resources Board noted that the detailed implementing regulations--which were required by law to be published as of July 1, 2025--are still likely months away, which renders compliance by the initial deadline of January 1, 2026 quite challenging for companies.
Companies with more than $1 billion in annual revenue but as little as $735,000 in sales in California would have to report greenhouse gas emissions to the state under a new regulatory proposal. But they may be hard-pressed to meet those new disclosure requirements by January as regulators indicated they are still months away from issuing regulations, missing a July deadline. Sydney Vergis, an assistant division chief at the California Air Resources Board, which is writing the regulations, said Thursday the agency plans to issue the rules by the "end of the year," but declined to give a specific date during a webinar.
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