The clock is ticking to close a corporate tax giveaway that could raid at least $100 million annually from Californians and land in the money bags of large corporations and banks.
On Aug. 1, I will announce legislation to close this unfair tax loophole and halt the "stagecoach robbery" of California’s taxpayers.
The corporate tax giveaway is called net operating loss “carryback.” Carrybacks are accountant speak for using a current year loss to get back taxes that were paid in a profitable year.
This tax break allows corporations to claim cash refunds on taxes they paid on actual profits up to two years in the past by crediting a current loss to those past profits.
AB 2408 eliminates net operating loss carrybacks, scheduled to take effect in California next year.
This unfair tax break would, for example, allow big banks to get cash back from foreclosures. Facebook also plans to use carrybacks to claim a state tax refund despite their lucrative IPO.
It’s wrong to rob state funding from schools and senior services when corporations can get away with paying little to nothing in taxes.
If loss carrybacks had been in effect in 2008, California would have been forced to give a tax refund to Countrywide Financial, the sub-prime mortgage lender.
It's time to give the people of California a break--not big corporations.
To learn more about my legislation, please visit my website.