Tax Treatment For Multistate Businesses. Clean Energy And Energy Efficiency Funding. Initiative Statute
By requiring businesses to pay their fair share, Proposition 39 would help bring equity to an out-of-balance tax system. Under existing California law, multi-state businesses can shield income from state taxation by picking their own income tax formula. Currently, they can pay taxes based either on the amount of business they do in California or on the number of buildings and employees they have here. This initiative would eliminate that choice by requiring most multi-state business entities to pay taxes based on their sales in California. Doing away with these loopholes would increase state revenues by an estimated $1 billion annually. In the next five years, half of the revenues would be allocated to projects and programs that create energy efficiency and clean energy jobs in California. The rest of the revenues would be deposited into the General Fund, and would then be used to increase the pool of state funds available for education. The rise in economic inequality, at a time of widespread financial instability, adds urgency to the need to distribute resources fairly and to make sure that businesses that benefit from California consumers pay a more reasonable share of the state's income taxes. Therefore, Bend the Arc strongly urges all Californians to vote YES on Proposition 39.