SACRAMENTO, Calif. (AP) - The Trump administration has rejected a proposed tax on managed care organizations in California. The decision could cost the state nearly $2 billion per year.
Gov. Gavin Newsom had planned to use that money to extend sales tax exemptions for diapers and tampons.
A letter from the federal government said it rejected the tax because it did not apply to all managed care organizations.
A spokesman for the California Department of Finance says the state will continue negotiating with the federal government and is confident they can reach an agreement.