SACRAMENTO, California — Sen. Steve Padilla reintroduced legislation on Monday to exempt renewable energy developers from paying taxes on Inflation Reduction Act benefits.
Padilla’s SB 302 would bring California in line with the 45 other states that don’t tax the revenue from sales of environmental credits from the Inflation Reduction Act, former President Joe Biden’s signature climate spending law that President Donald Trump has vowed to roll back. The change would be retroactive to the 2023 and 2024 tax years, meaning it would apply to developers regardless of what happens to federal spending under Trump.
“California needs more energy, not less,” Padilla said in a press release. “Updating our tax law to conform with federal law will help make energy projects cheaper and more affordable for all Californians.”
The legislation includes as co-authors the respective chairs of each chamber’s energy committee, Sen. Josh Becker and Assemblymember Cottie Petrie-Norris, giving it a little more weight than a version last year, SB 1191, that got held in the Senate Appropriations Committee after the state’s Franchise Tax Board estimated it could cost California’s general fund $250 million a year.
