Measure Approved on Bipartisan Vote
SACRAMENTO – Speaker John A. Pérez’s AB 1500, which seeks to close a corporate tax loophole that only benefits out-of-state corporations at the expense of California’s businesses, and uses the money to fund a two-thirds reduction in student fees for middle class students at the UC and CSU, passed with bipartisan support in the Assembly today. The measure, which is part of the two-bill Middle Class Scholarship Act, will create tax fairness for California’s businesses by removing an unfair provision of the tax code that benefits out-of-state corporations, while also addressing the crisis in higher education affordability at the UC, CSU and Community College systems.
“Today’s bipartisan vote was a critical step forward for the Middle Class Scholarship Act,” said Speaker John A. Pérez (D-Los Angeles). “By closing this loophole, we can remove an unfair advantage in the tax code that helps huge, out-of-state corporations at the expense of California businesses, and we can use the money to roll back a decade’s worth of fee hikes at the UC and CSU for middle class families.”
Speaker Pérez introduced the Middle Class Scholarship Act in February to address the crisis in higher education affordability. AB 1500 closes the Elective Single Sales Factor provision of the tax code, which allows out-of-state corporations to choose amongst different formulas in determining their tax obligation to the state. This gives out-of-state corporations an unfair advantage over California businesses, and by closing this loophole, AB 1500 will put an end to the one billion dollar tax break that incentivizes companies to move jobs out of California.
“We should all agree that we must do everything possible to make California a more competitive place for job creation and to provide relief to middle-class families,” said Assemblyman Nathan Fletcher (I-San Diego). “By closing a tax loophole that benefits out-of-state corporations we can put millions of Californians a step closer to achieving the American Dream. Now is the time to restore access to higher education and also make California a more competitive place to create 21st Century jobs.”
AB 1501 passed the Assembly earlier this year, and is currently pending in the State Senate. With today’s vote, AB 1500 will now be considered by the Senate, and if both measures are successful, will be sent to the governor for his consideration. If the governor signs both measures, students whose families earn less than $150,000 will see their student fees lowered by two-thirds at the CSU and UC, and $150,000,000 will be directed towards relief for Community College Students.
CONTACT: John Vigna (916) 319-2408
Website of Speaker John A. Pérez: www.asmdc.org/speaker