California voters passed a ballot initiative financed by hedge fund executive Thomas Steyer that strips out-of-state corporations of an option for lowering their state income taxes.
The measure was winning 59.5 percent to 40.5 percent, with 58 percent of the precincts counted, according to the Associated Press.
The initiative requires corporations to base their tax solely on in-state sales, rather than a formula that let some pay less by factoring in their property and workforce in California. It will raise about $1 billion annually, with half set aside for the state’s general fund and half for energy- efficiency programs.
Steyer, who announced last month that he was stepping down as chairman of $20 billion hedge fund Farallon Capital Management LLC in San Francisco, spent $29.5 million of his personal fortune on the measure.
Under previous law, businesses engaged in agriculture, mining and banking had to base their corporate taxes equally on payroll, property and sales in California, according to the state Finance Department. Other companies were allowed to choose between a formula in which 50 percent of taxes were based on California sales and 25 percent were based on property and 25 percent on other sales, and one in which 100 percent was based on sales.
The rule was put in place as part of a deal Governor Arnold Schwarzenegger struck with fellow Republicans in 2009 to get them to agree to raise taxes to help erase a $35 billion deficit.
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