Opponents prime arguments for corporate tax campaign

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Lawmakers will meet Wednesday to review an obscure corner of California’s tax code that could be worth $1 billion a year.

The debate focuses on Proposition 39, a campaign to change how taxes are calculated for corporations. If approved by voters in November, it would increase revenue and direct half of that money to energy- efficiency projects for the next five years.

Proposition 39 would force multi-state companies to pay taxes based on their sales in the state. Right now they can choose between that and a combination of sales, property and payroll taxes. Supporters of the ballot measure say the change would increase taxes on out-of-state corporations that have fewer operations in California but sell a lot of products in the state.

To make their case, the supporters are pointing out that some of the same companies fighting Proposition 39 wanted the same policies in their home states when it financially benefited them.


‘They made some of the exact same arguments that we’re making in California,’ said Chris Lehane, a spokesman for Californians to Close the Out of State Corporate Tax Loophole.

The campaign also plans to release a new video Thursday spoofing the companies as participants in the ‘tax dodger olympics.’

The California Manufacturing and Technology Assn., which opposes Proposition 39, says current tax law isn’t the loophole some make it out to be. In a letter, the group says the ballot measure would “further erode California’s ability to attract and compete with other states for business investment and hiring.”


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-- Chris Megerian in Sacramento