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Tax Law

California Governor Signs Budget Bill Including Tax Increases

Following up on our recent coverage of the California budget negotiations, on June 29th Governor Newsom signed a package of bills comprising the state’s budget for the 2020-2021 fiscal year. The budget package is composed of the primary budget bills, AB 89 and SB 74, along with numerous budget trailer bills. One trailer bill included in the budget package, AB 85, raises taxes on business taxpayers by suspending net operating loss deductions and limiting the amount of business tax credits that can be claimed annually to $5 million. These provisions are now law for tax years 2020 to 2022.