Assemblyman Mike Gatto (D-Silver Lake) recently joined forces with Speaker of the Assembly John Perez (D-Los Angeles) to close a tax loophole that benefits large out-of-state companies and to use the billions of dollars collected to reduce fees for middle-class students who attend state universities.
Current law lets companies calculate their California corporate taxes based on a combination of their sales, property and employees. Therefore, corporations can keep jobs outside the state and pay a lower tax.
The proposed legislation would require that all corporate taxes be based on sales only, which could collect almost $1 billion more each year.
The additional money would be used to offset the rising fees to attend state community colleges and universities.
“This bill package is one of the most important things we can do for the future of our state,” Gatto said in a statement. “By closing the loophole that encourages corporations to outsource jobs, we support California workers and businesses, and we use the money to invest in the future of middle-class children.”
— Mark Kellam, Times Community News