Jarrell Cook

Assembly to hear bill banning punitive damage deductions from income taxes

By Jarrell Cook, Legislative Manager, Government Relations

Capitol Update, June 26, 2017 Share this on FacebookTweet thisEmail this to a friend

SB 66 by Senator Bob Wieckowski (D-Fremont) has moved from the Senate to the Assembly, and has been referred to the Assembly Committee on Revenue and Taxation. The bill would alter existing law to prohibit businesses from deducting punitive damages they incur as a result of litigation from their income taxes as necessary business expenses.

Manufacturers, who often face frivolous lawsuits or lawsuits for unintentional and rare defects that occur during the production process, rely on the predictability afforded in the current law to incorporate damages awards into their budget for the upcoming year. This provides a safety valve that allows manufacturers to keep their doors open, benefitting their employees and the community they serve.

CMTA and a coalition of advocates for common sense tax policy are opposing this measure. Our previous article on this bill is available here. Please contact Jarrell Cook, Associate Policy Director for Government Relations, at jcook@cmta.net or by phone 916-498-3356 for more information.

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