California – Moves Toward Creating Business Tax Break Review Board

California’s largest income and sales tax breaks would get more scrutiny under a bill approved in the Senate Monday.

S.B. 956 by Sen. Hannah-Beth Jackson (D) would establish a California Tax Expenditure Review Board to examine the goals, beneficiaries, and costs of nine tax breaks that cost the state $8.2 billion a year and have no metrics to measure their effectiveness and no expiration date.

The bill moves to the Assembly after passing the Senate 25-13 and must pass the Assembly by Aug. 31 to reach Gov. Gavin Newsom’s (D) desk. He hasn’t taken a position on this year’s version of the bill.

The measure is similar to Jackson’s 2019 bill that Newsom vetoed because, he said at the time, it wasn’t necessary. But Jackson said the coronavirus pandemic makes it more urgent.

Sales and use tax exemptions to be examined are:

  • Animal life, feed, seeds, plants, fertilizer, drugs and medicines;
  • Farm equipment machinery;
  • Jet fuel for international flights; and
  • Custom computer programs.

For more information: Bloomberg Tax

Bloomberg tax
by laura mahoney
June 22, 2020