California Gov. Newsom's budget could cost businesses billions in higher taxes
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California Gov. Gavin Newsom pledged that his budget proposal to balance the state's ballooning $45 billion deficit would not include higher taxes on workers or businesses.
«I don't see there's a real need right now to increase general taxes in the state, and put more burden on working folks and our competitive posture. I do not believe we need that this year or next year,» Newsom, a Democrat, told reporters during a press conference earlier in May. «I don't know how many times I can say no to that tax question.»
Yet a new report published by the California Taxpayers Association (CalTax), a nonpartisan and nonprofit tax research group, suggests Newsom's revised budget plan actually contains several indirect tax increases on businesses that could cost as much as $18 billion over the next four years.
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California Gov. Gavin Newsom attends an event with fellow governors in the East Room of the White House in Washington, D.C., on Feb. 23. (Chip Somodevilla/Getty Images / Getty Images)
Newsom called for banning businesses with annual revenue over $1 million from deducting their net operating losses and limiting usage of business tax credits to $5 million for the 2025, 2026 and 2027 tax years.
CalTax estimated that change alone would increase corporate tax revenue by $15.9 billion over the next four years.
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The proposal also calls for reversing a recent ruling by the Office of Tax Appeals (OTA) regarding the treatment of repatriated income. OTA ultimately sided with Microsoft in its long-running dispute with the Franchise Tax Board (FTB) over
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