Both the California Senate and the Assembly have released the budget proposals that will be used in the California budget negotiations over the next two weeks. While both of the proposals include expanding the Earned Income Tax Credit (although not as much as the Governor’s proposal), notably absent from both proposals is conformity to any of the Tax Cuts and Jobs Act provisions.
The Assembly’s proposed budget notes that there has been some discussion of conformity, but states that there “has been insufficient opportunity to scrutinize and build consensus on this proposal” and indicated that conformity would be addressed later in “clean up” bills.
Spidell has been advocating that there must be conformity to at least two key provisions of the TCJA:
- The accounting method simplification for small businesses; and
- The repeal of the technical partnership provisions.
Failure to conform to these two provisions will cause significant compliance nightmares for California taxpayers. We feel strongly that conformity should be approved as quickly as possible and should be part of the budget deal. If you agree, please contact your state representatives in the Senate and Assembly as soon as possible.
You can find your state representatives here: