Sacramento , CA — Last week, the California State Assembly passed AB 1369, authored by Assemblyman Mike Gatto (D-Los Angeles) by a 62-0 vote. The legislation would prevent those engaging in illegal activities from deducting their business expenses connected with the illegal activity.

The bill will stop more criminals from receiving state tax refunds for their illegal actions. Current law disallows deductions for expenses and the cost of goods sold from gross income for some illegal activities, but there are still many felonies not on the prohibited list. The felonies that were left out of the original statute could have income-tax implications.

AB 1369 is necessary to close this loophole on a series of additional crimes, such as Medicare Fraud, Child Pornography, and Human Trafficking. “At a time when our state is bearing the burden of seemingly endless cuts to programs that benefit us and our families, I find it appalling that California taxpayers are reimbursing criminals for their expenses while committing these crimes,” said Gatto. “Someone who illegally recruits insurance patients, for instance, to make illegal claims for government health care, robs the state budget. To allow them to deduct their expenses adds insult to the injury they cause.” The bill now moves to the State Senate for consideration.

(Mike Gatto is the Assistant Speaker Pro Tempore of the California State Assembly. He represents the cities of Burbank, Glendale, and parts of Los Angeles, including Los Feliz, North Hollywood, Silver Lake, Toluca Lake, Valley Glen, and Van Nuys. Website of Assemblyman Mike Gatto:

By daryl

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