Business & Economy

California tax plan sheds corporate loopholes, gives low-income tax breaks

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Gov. Jerry Brown and a bipartisan group of state lawmakers have announced a plan to scrap a corporate tax loophole and use the money to give lower-income Californians a tax break.

For the last three years multi-state companies doing business in California got a break on state sales tax by moving offices and employees to other states. You heard that right — the tax break created an incentive for companies to expand anywhere but California.

Brown and a bipartisan group of Assembly members say that’s not what they want. They are proposing to eliminate the sales tax loophole and say doing so will generate an extra $1 billion in revenue.

The lawmakers say they’ll use that money to provide tax breaks that encourage companies to stay and expand in California. They would also give some money back to taxpayers.

The lawmaker’s plan to increase the standard deduction Californians can claim on their tax return by nearly 30 percent. Individuals could claim an extra $1,000. Couples could claim $2,000 more.