New bill would link state contracts with tax filing formula

By CMTA Staff

Capitol Update, Aug. 3, 2012 Share this on FacebookTweet thisEmail this to a friend

The Sacramento Bee has alerted its readers that California Senator Kevin de Leon (D-Los Angeles) plans to introduce amendments to SB 911 that would prohibit state contracts with multi-state companies that pay state income taxes based on a calculation using the three factor formula of sales, payroll and property.  This would impact CMTA members who do not choose to apportion their income using the new single sales factor formula that became recently available in 2009.  According to the alert, another proposed amendment would authorize the Franchise Tax Board to disclose which formula companies use to calculate their taxes, a violation of privacy for all corporate tax payers no matter how they choose to file.

SB 911 sits in the Assembly Local Government Committee while AB 1500 (Speaker John Perez, D-Los Angeles), to remove the three-factor formula and mandate that all corporations use only single sales factor to apportion income, is stuck on the Assembly Floor where it failed to receive the 2/3 supermajority vote required for any tax increase.  Another bill, AB 2439 (Mike Eng, D-Monterey Park), requires the Franchise Tax Board to publish a list of the top 1,500 largest corporate taxpayers with information related to their tax liability and choice of apportionment method.  The Senate Appropriations Committee will have a hearing on AB 2439 on August 6.

CMTA will oppose efforts to impose mandatory single sales factor or disadvantage companies who choose lawful income apportionment methods under California law.

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