By a razor-thin margin, the California Assembly passed legislation today to raise a billion dollars annually for middle-class college scholarships by altering tax law for numerous out--of-state corporations..
The measure, Assembly Bill 1500, passed 54-24, the bare-minimum two-thirds vote needed for tax or fee increases. Democrats supported the measure, as did Republicans Brian Nestande of Palm Desert and Independent Nathan Fletcher of San Diego
Assembly Speaker John A. Perez proposed the bill as a companion to his separate legislation, Assembly Bill 1501, which would spend the billion dollars raised to assist college and university students whose families earn less than $150,000 per year.
AB 1500 would require out-of-state corporations to pay income taxes based on their sales in California. Under a tax deal struck in 2009, such corporations have the option of choosing a tax obligation based on payroll and property in California as well, which can lower their tax debt.
Republican opponents of AB 1500 characterized the measure as a billion dollar-tax increase on corporations at a time when California desperately needs job creation to bolster its economy.
Perez, during floor debate, noted that some California corporations -- such as Qualcomm and Genentech -- support AB 1500 as a way to help them compete against out-of-state firms that sell in California, the nation's most populous state.
AB 1500 now goes to the Senate for consideration.
Editor's Note: The headline of this post has been changed to correct that one Republican and one independent voted for the tax. Updated at 5:08 p.m. Aug. 13, 2012.