Today, California Governor Gavin Newsom signed budget trailer bill SB 113, allowing taxpayers to again fully utilize business tax credits, like the R&D credit, and net operating loss deductions for taxable years beginning on or after January 1, 2022. For tax years 2020 to 2022, AB 85 (enacted in 2020), limited the amount of business tax credits that could be claimed annually to $5 million and suspended use of net operating loss deductions for business taxpayers with income of $1 million or more (see our previous coverage on AB 85 here and here). Enactment of SB 113 is great news for businesses, as it lifts the restrictions imposed by AB 85 a year early, allowing businesses to use their net operating losses and full tax credits in computing their 2022 California corporate tax liability.