Newsom to Limit Corporate Tax Breaks to Curb California Deficit

California Gov. Gavin Newsom (D) wants to scale back corporate tax breaks to help close the pandemic-induced budget deficit.

The governor’s revised budget plan for the fiscal year that begins July 1 would temporarily suspend net operating loss deductions for medium and large businesses, and prohibit use of the research and development tax credit and other incentives for corporations and individuals to offset more than $5 million in tax.

The changes would increase state revenue by $4.5 billion and help close a deficit that Newsom estimates will be $54 billion through June 2021.

The rollbacks “recognize ...