California Aims to Undo Microsoft Tax Refund to Fight Deficit

California risks a $1.3 billion hole in its 2025 budget, officials say, if lawmakers can’t enact a measure that would erase a ruling that granted Microsoft Corp. a $94 million income tax refund and opened a path for other multinationals to pursue similar refunds.

The “trailer bill,” proposed as part of Gov. Gavin Newsom’s (D) May budget revision, would help address a revenue problem as the state copes with a $27.6 billion budget shortfall. But business taxpayers see the bill as a last-minute policy shift that would undermine the authority of the state’s independent tax appeals body.

David ...