California Employers Against Higher Taxes, a coalition of companies that employ thousands of middle-class Californians in good-paying jobs, launched a website about the job-threatening consequences of a proposed $1 billion tax increase being considered by the California Legislature.

“AB 1500 is a $1 billion tax increase on companies that create jobs, pay taxes on their corporate, payroll and sales receipts, and have employees here,” said Senator Doug LaMalfa (R-Richvale.)  “California remains mired in one of the worst economic depressions in history.  It makes no sense to mandate higher taxes on a company every time it creates a new job or opens a new facility here.  AB 1500 is bad policy and must be defeated.”

AB 1500 by Assembly Speaker John Perez (D-Los Angeles) proposes to change the tax code by removing one of two methods that companies use to determine and pay their fair share of taxes to the state.  The traditional method calculates tax liability using payroll, property and sales receipts and has been the standard for more than 40 years.

AB 1500 eliminates this traditional method and would force every business to pay taxes solely on the basis of sales receipts. This “one size fits all” approach is called “mandatory single-sales factor” and represents a $1 billion tax increase on California businesses.

At the depth of California’s recession in 2009, lawmakers reached a bipartisan agreement aimed at maximizing job creation. It established an additional method for businesses to determine their tax liability based on sales receipts.  The Coalition supports keeping the current elective system in place because while not all companies are similarly structured, they provide good paying jobs for middle-class California workers.

“AB 1500 is sending the wrong message to employers in California,” said Senator Mimi Walters (R-Laguna Hills.)  “We need businesses to thrive in our state so we can put people back to work.  If we tax businesses, they’re simply going to leave.”

In a letter to Senator Kevin de Leon (D-Los Angeles) on January 6, 2011, California Legislative Analyst Mac Taylor wrote: “Broadly speaking, a switch to a mandatory single sales factor would tend to increase taxes for companies that have lower property and payroll factors than their sales factor.”

Taylor’s findings underscore the concerns of job creators about a tax increase that would make it harder to do business in California.  It’s a change that threatens existing jobs and future job growth, and would undermine the state’s economic recovery.


About The Coalition

California Employers Against Higher Taxes is a broad coalition of businesses that employ thousands of middle-class Californians in good-paying jobs. Its members include companies such as Chrysler, General Motors, International Paper, Kimberly-Clark, and Procter & Gamble.  For more information, please visit, or follow on Twitter: CAJobsNotTaxes.