Breaking News Bar
updated: 9/1/2012 2:06 PM

California Senate kills bid to end business tax break

hello
Success - Article sent! close
  • Lobbyist gather around a television monitor in the halls of the Capitol to watch the action in the Assembly during the final day of the Legislative session Friday in Sacramento, Calif.

      Lobbyist gather around a television monitor in the halls of the Capitol to watch the action in the Assembly during the final day of the Legislative session Friday in Sacramento, Calif.
    Associated Press

 
Bloomberg News

A California bill that would have stripped out-of-state corporations of an option for lowering their state income taxes was defeated in the closing hours of the Legislature's term.

The measure would have required all corporations to base the tax solely on in-state sales, rather than a formula that let some pay less by factoring in their property and workforce in California. It failed in the Senate by a vote of 22-15.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

Revenue from the bill, which would have raised $1.2 billion next year and $950 million in each of the following two years, was to have been earmarked for university scholarships to aid students whose families earn less than $150,000 a year.

California taxpayers will get a chance to vote on the so- called single sales factor in November in a ballot measure financed by San Francisco hedge-fund executive Thomas Steyer.

Steyer, chairman of Farallon Capital Management LLC, has put $21.9 million into an initiative to eliminate the tax break. His proposal would earmark half of the revenue for the state's general fund and half for energy-efficiency programs.

Under current law, businesses engaged in agriculture, mining and banking must base their corporate taxes equally on payroll, property and sales in California, according to the state Finance Department. Other companies may choose between a formula in which 50 percent of taxes are based on California sales and 25 percent are based on property and 25 percent on other sales, and one in which 100 percent is based on sales.

The rule was put in place as part of a deal Governor Arnold Schwarzenegger struck with fellow Republicans in 2009 to get them to agree to raise taxes to help erase a $35 billion deficit.

Since then, Democrats have sought to reverse the agreement. While the party holds a majority of legislative seats, Democrats fall short of the two-thirds vote required for tax increases.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.