CDP Delegates: Join Our Coalition to Close the Water's Edge Corporate Tax Loophole

Fellow Delegates,

For too long, California has enabled a corporate tax loophole known as Water’s Edge that allows multinational corporations to dodge their tax obligations on billions in profits every year. From 2024-2025 alone, Water’s Edge cost taxpayers $4.1 billion. To put that in perspective, that’s roughly how much California is losing in food assistance funding from Trump’s budget.

Enough is enough. Alongside Assemblymember Sade Elhawary, Assemblymember Alex Lee, SEIU, California Environmental Voters, the Climate Center, the California Teachers Association, and United Domestic Workers, I've introduced AB 1790, our bill to close the Water’s Edge loophole.

With corporate profits at record levels and federal corporate taxes at historic lows, California, the world’s fourth largest economy, needs to clamp down on tax avoidance by the world's biggest corporations. These companies benefit from our dynamic economy, exemplary workforce, and world-renowned institutions for research and higher education; they should pay their fair share.

Water’s Edge is the largest corporate tax break in California, giving corporations the ability to pick and choose how their trillions in profits will be taxed. This incentivizes corporations to create shell companies to hide their profits in offshore tax havens. AB 1790 fixes this perverse incentive, returning California’s tax code to a system known as “Worldwide Combined Reporting (WWCR)”. To avoid overcomplication, just know that’s a widely used way of accounting for taxes that is a better deal for California taxpayers and residents.

As AB 1790 works its way through the legislative process, I’ll keep you updated, including ways you can help.

The multinational corporate polluters and some of Trump’s biggest donors in the state hate our bill, which means we must be doing something right.

Sign the petition join our coalition of supporters.

Onwards,
Assemblymember Damon Connolly
Candidate, State Senate, District 2