What it would do: Proposition 39 ends a corporate tax loophole to raise $1 billion a year in revenue for California.
Currently, California allows multistate companies to choose between two formulas — one that is based on the amount of sales in California or one that allows them to calculate their taxes based on payroll, property and sales. That benefits companies based in other states and allows companies to pay the least amount depending on how profitable they are year to year.
Proposition 39 would change California tax law so all businesses follow the same formula based on the percentage of their sales that are apportioned to the state. The state Franchise Tax Board has estimated the change would raise about $1 billion a year.
Support: Tom Steyer, hedge fund manager and founder of Farallon Capital Management, has funded the campaign. The American Lung Association in California and local and small business groups have endorsed the initiative.
Oppose: The California Manufacturers & Technology Association and anti-tax groups such as the National Tax Limitation Committee.
Campaign donations: Groups supporting the initiative have raised more than $22 million, virtually all of it donated by Steyer. There is no organized opposition against Proposition 39.