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SB 1372 - Amends the Corporate Tax Rate - California Key Vote

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NOTE: A MAJORITY OF THE TOTAL MEMBERS IN THE LEGISLATIVE BODY IS REQUIRED TO PASS A BILL: 41 MEMBERS OF THE ASSEMBLY AND 21 MEMBERS OF THE SENATE.

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Title: Amends the Corporate Tax Rate

Vote Smart's Synopsis:

Vote to pass a bill that amends the corporate tax rate, effective January 1, 2015.

Highlights:

  • Requires publicly held corporations to pay a tax rate on net income dependent on the “compensation ratio” as follows (Sec. 1):
    • 7 percent if the ratio is 0-25;
    • 7.5 percent if the ratio is 25-50;
    • 8 percent if the ratio is 50-100;
    • 9 percent if the ratio is 100-150;
    • 9.5 percent if the ratio is 150-200;
    • 10 percent if the ratio is 200-250;
    • 11 percent if the ratio is 250-300;
    • 12 percent if the ratio is 300-400; and
    • 13 percent if the ratio is over 400. 
  • Defines “compensation ratio” as a ratio where the numerator is the compensation of the highest paid employee, and the denominator is the median compensation of all employees (Sec. 1).
  • Requires financial institutions to pay a tax rate on net income dependent on the compensation ratio plus 2 percent (Sec. 1).
  • Increases a taxpayer’s applicable tax rate by 50 percent if the following changes occur between tax years (Sec. 1):
    • The total number of full-time employees is reduced by more than 10 percent; and 
    • The total number of contracted employees or full-time foreign employees has increased (Sec. 1).

Full Bill Text

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