Ballot measure: Proposition 39

Under the measure, out-of-state corporations that sell products in California would lose their ability to choose how they're taxed.

The campaign supporting the measure is now running a 30-second TV ad in major media markets in the state.

What's the charge?

"Out-of-state corporations make huge profits in California, but an unfair loophole lets them avoid a billion dollars in California taxes. Corporations can move facilities and jobs out of state and get a tax break under the loophole. The more jobs they move, the bigger the break."

Is it true?

Yes. Under a secret deal worked out in dead-of-night negotiations in 2009 over a temporary hike in sales and income taxes that Republicans in the Legislature were reluctant to sign off on, out-of-state corporations get to choose how they are taxed. It was a tax break that the corporations had sought for a decade, and Republicans seized on the Democrats' desire to raise other taxes to push it through. Out-of-state corporations typically choose to pay taxes using a formula based on their payroll, property and sales -- which means they generally pay less than those that have facilities and employees in the state.

-- Steven Harmon, Staff



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