January 31, 2012

Assembly rejects proposal to eliminate tax deductions for punitive damages

The California State Assembly has rejected AB 1276, the proposal to prohibit taxpayers from deducting punitive damages as a business expense.  (See our prior post.)  The vote tally was 50 Ayes and 26 Noes, with 4 members not voting, which means the proposal failed under Prop 26, which requires a two-thirds supermajority vote to approve a tax increase.