State Tax Loophole Bill

Assemblyman Brian Nestande has resigned as chairman of the Assembly Republican caucus a day after providing the lone GOP vote on a bill that would close a tax loophole benefiting out-of-state corporations.

AB1500, which would eliminate a $1 billion tax break and use the expected windfall to reduce college tuition, passed the Assembly on Monday without a vote to spare.

The Legislature approved the loophole in 2009 as a way to get Republican votes for the state budget. It allows corporations to use the more advantageous of two tax formulas.

On Tuesday, the Palm Desert lawmaker said eliminating the loophole would benefit California-based businesses. He cited several states with Republican governors – including Texas and Wisconsin – that have the same corporate tax policy he wants to implement in California.