Several proposed initiatives impacting California businesses are progressing through the administrative process to be included on the 2022 ballot.
Income Tax
Changes have been proposed to the creation of the Clean Cars and Clean Air Trust Fund to revise the imposition of corporate taxes. Previous proposals would have imposed an additional tax of 2.16% on all corporations doing business in the state with net income in excess of $10 million for taxable years beginning on or after January 1, 2023. This increase is now being removed from the proposal. The proposed increase of 1.75% tax on individual income in excess of $2 million remains in the terms of the proposed initiative.
An amendment to another pending initiative would add a provision to impose an additional tax of 2.45% on corporate income over $20 million for entities doing business in the state for taxable years beginning on or after January 1, 2023. The previously proposed change to require all corporate taxpayers to report income on a worldwide combined basis has been removed from the initiative.
A coalition headed by the California Taxpayers Association had been lobbying to defeat the proposed tax increases.
Property Tax
Two ballot initiatives are pending that would address the state’s homeless situation by generating revenue from increased property tax surcharges. One proposal would create a new property tax surcharge of up to 1.4% on properties valued over $4 million. The second initiative would impose a property tax surcharge of 1% on properties valued at $5 million or more, using a formula to impose lower surcharges on properties valued between $4 and $5 million. A coalition of housing advocates expects that the revenue from the proposals would create more than 26,000 homes for the homeless over the next decade and help about 475,000 renters stay in their homes each year.
Ryan will continue to monitor and report on these developments.
TECHNICAL INFORMATION CONTACTS:
Mark L. Nachbar
Principal
Ryan
630.515.0477
mark.nachbar@ryan.com
Mary Bernard
Manager
Ryan
401.272.3363
mary.bernard@ryan.com
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