A “multi-state” business is one that operates both in California and in other states or countries. The majority of California’s corporate income taxes come from multi-state businesses. Current law gives these businesses a choice about which way they calculate how much tax they owe to the state. They can pay taxes based on the percentage of their total sales that are in California. But some choose a formula that also looks at employees and property out of the state, because then their taxes come out lower.
Supporters of Proposition 39 assert that it will close a tax “loophole” that currently rewards out-of-state companies for taking jobs out of California and, for tax purposes, treats out-of-state companies the way California-based companies are treated.
Opponents argue that Proposition 39 is a tax increase.
What Prop 39 would do if it passes:
Effect on the state budget:
People for Prop 39 say (www.cleanenergyjobsact.com):
People against Prop 39 say (www.Stop39.com):