May 4, 2026
Orange County Business Council remains opposed to AB 1790 (Connolly), legislation that would repeal California’s longstanding water’s-edge election and move the state toward mandatory worldwide combined reporting for multinational corporations. On April 27, the bill advanced out of the Assembly Revenue and Taxation Committee on a 4-2 vote and now heads to the Assembly Appropriations Committee.
OCBC is deeply concerned that AB 1790 would significantly increase tax burdens on companies operating in California while creating substantial uncertainty for employers, investors and international businesses that support the state’s economy. The proposal represents a major departure from decades of established international tax policy and risks undermining California’s economic competitiveness at a time when businesses are already navigating rising costs, affordability challenges and economic uncertainty.
The water’s-edge election was established through bipartisan agreement in the 1980s to provide stability, avoid international tax conflicts and prevent retaliation from foreign governments against U.S.-based companies. Reversing this framework could expose California businesses to increased compliance burdens, duplicative taxation concerns and potential economic repercussions from international trading partners.
During committee testimony, business organizations and international representatives warned that AB 1790 could discourage investment in California and create long term instability within the state’s tax structure. More than 2,800 international companies operate in California and directly employ approximately 885,000 Californians, underscoring the importance of maintaining policies that encourage investment and job creation.
OCBC supports a competitive, stable and predictable business climate that fosters economic growth across California and the Orange County region. Policies that increase complexity and costs for employers ultimately threaten investment, innovation and workforce opportunities.
As AB 1790 moves through the legislative process, OCBC will continue working alongside the broader business community to advocate against policies that weaken California’s economic competitiveness and create unnecessary barriers to growth.
For questions, please email Amanda Walsh, Vice President of Government Affairs.
