Schwarzenegger vetoes tax relief for home sellers, asks for new bill

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Gov. Arnold Schwarzenegger Thursday made good on his threat to veto a bill that would provide tax relief to Californians who sell their home in a ‘short sale’ and green tech companies that receive federal stimulus funds. Schwarzenegger said he could not support the bill because it would increase penalties on corporations and wealthy individuals who provide false information on their tax returns. Several large business groups lobbied against the increased penalties.

The governor had urged lawmakers to quickly pass a new law without the penalties. But lawmakers balked. They left town for recess today without moving another bill to the governor’s desk. They will not return until April 5.

Read the governor’s veto message here.

-- Evan Halper