Californian Offshore Tax Bill Misses Chance For Second Hearing

by Mike Godfrey, Tax-News.com, Washington

01 September 2004

Bermudian newspaper, the Royal Gazette reported last week that a Democrat-sponsored bill which would oblige California-based firms with offshore headquarters to continue paying taxes in the state failed to obtain a second hearing last Thursday.

The legislation, sponsored by Democratic Assemblywoman Judy Chu, would prohibit expatriate companies with at least 80% of their assets in the United States from using existing tax breaks to reduce their taxable income in California.

The measure would reportedly have prevented 18 firms from reducing their tax bill in this way.

Following its narrow defeat in a State Assembly vote last month, a second hearing was scheduled for August 26. However, according to the Royal Gazette, the schedule of daily business for California's lawmakers on that day did not include a reconsideration of the measure.

Speaking to the newspaper on the issue of the California bill, acting Minister of Finance, Michael Scott announced that:

"The position of the (Bermudian) Government remains as previously stated on this subject, namely that Bermuda has not changed its more than 100 year old consumption based tax regime. We respect the USA tax regime is a matter for the USA Federal Government."

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