State Treasurer Seeks to Shut Tax ‘Loopholes’

State Treasurer Phil Angelides said Tuesday that California could raise $386 million a year and forestall budget cutbacks to education and healthcare programs by eliminating tax breaks such as those given to yacht buyers, oil producers and companies that move overseas to cut their taxes.

“We intend to fight very hard to close the unjustified corporate tax loopholes that have riddled our budget,” Angelides, a Democrat, said at a news conference in Sacramento. He was joined by state lawmakers, including Darrell Steinberg (D-Sacramento), chairman of the Assembly Budget Committee, and Gil Cedillo (D-Los Angeles), chairman of the Senate Revenue and Taxation Committee.

California is anticipated to have a budget shortfall of about $15 billion next year that Republican Gov. Arnold Schwarzenegger has proposed closing with spending cuts and the proceeds of a bond sale. It would take two-thirds of the Democratic-controlled Legislature to eliminate the tax breaks targeted by Angelides.

Among the provisions criticized by Angelides is a law that allows consumers to avoid paying sales taxes on yachts, cars or airplanes if they are bought in another state and stored there for 90 days before being brought to California. Another provision includes a special resource-depletion income-tax write-off for oil and gas companies. Also targeted is a break that lets firms move their headquarters offshore to avoid state and federal income taxes.