Prop 24: Repeals Recent Legislation That Would Allow Businesses to Carry Back Losses, Share Tax Credits, and Use a Sales-Based Income Calculation to Lower Taxable Income.
Summary: Repeals recent legislation that would allow businesses to shift operating losses to prior tax years and that would extend the period permitted to shift operating losses to future tax years. Repeals recent legislation that would allow corporations to share tax credits with affiliated corporations. Repeals recent legislation that would allow multistate businesses to use a sales-based income calculation, rather than a combination property-, payroll- and sales-based income calculation.
Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Annual state revenue increase from business taxes of about $1.7 billion when fully phased in, beginning in 2011-12
CCRC endorses a ‘YES’ vote on Prop 24
Proposition 24 would repeal the corporate tax cuts that were passed in closed-door budget deals of 2008-09 that cost California $1.3 billion and only benefitted 2% of California’s businesses. The tax breaks were given with no requirement that they actually result in the creation of private-sector jobs. CCRC supports repealing these tax cuts because the California budget crisis cannot be solved by spending cuts alone, and surely not with spending cuts combined with tax cuts with no proven value to the economy. This initiative would ensure continued revenue for the State which would help our schools, health care, and other necessary services that have suffered severe budget cuts over the last few years.