CA Board of Equalization gives tax refunds to corporations that paid no income taxes

Eureka Times-Standard (California)

California is in a financial mess.

But that has not stopped a group of elected officials who have given away $5 million in tax refunds to businesses that paid no California income taxes, and it may not prevent them from giving away $77 million more.

Critics are fuming over this, as should every Californian who has paid a cent in income tax.

The California Board of Equalization, a group of elected officials who oversee state tax policy, decided on Dec. 15 to award $4.1 million in tax refunds to Conexant Systems Inc. of Newport Beach, which bills itself as “a worldwide leader in semiconductor solutions for broadband communications, enterprise networks and the digital home.” The board also voted to award $624,450 to Grundfos U.S. Holding Corp., which has a pump manufacturing facility in Fresno, and $163,155 to Lightwave Electronics Corp., a Mountain View-based laser technology company.

In each case, the board overruled its own staff, which recommended against awarding the refunds.

These three companies were among 25 that applied for the tax refunds last year before the Legislature passed a bill ending the practice. A majority of board members in each vote said it was fair to award the refunds because last-minute amendments in the bill allowed consideration for companies that had already applied.

California began providing the so-called manufacturers investment credit during the state’s 1991 economic downturn. The refund reimbursed companies for new equipment purchases in hopes it would stimulate more than 100,000 jobs over 10 years. But it has failed to live up to its promise, and the nonpartisan Legislative Analyst’s Office found little evidence that the tax break spurred economic growth.

The Legislature ended last year.

“To actually be giving a gift to companies that paid no taxes is a slap in the face of every taxpaying citizen in the state,” said Doug Heller, an advocate for the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

We couldn’t agree more.

The best way for taxpayers to make their voices heard is to state their feelings directly to their elected representatives.

Here they are:

* State Sen. Wesley Chesbro, State Capitol, Room 5100
Sacramento, CA 95814
[916] 445-3375 Fax: [916] 323-6958 E-mail: [email protected].

* Assemblywoman Patty Berg, California State Assembly District 1, P.O. Box
942849, Sacramento, CA, 94249-0001
[916] 319-2001 FAX: [916] 319-2101 E-mail: [email protected].

* Governor Arnold Schwarzenegger, State Capitol Building, Sacramento, CA 95814
[916] 445-2841 FAX: [916] 445-4633 E-mail: http://www.govmail.ca.gov