Sacramento, CA: The GCVCC has taken a position of opposition to SB 37. The position is taken based on the GCVCC Platform position(s) found under “Economic Development and Business Regulations”.
GCVCC Legislative Team: This bill would generally discourage businesses from relocating to (or staying) in California, which includes the Coachella Valley. If passed, California will have the highest corporate tax rate in the country, not a distinction we would benefit from when it comes to business investment and job creation.
CalChamber Analysis: SB 37 imposes a tax on California businesses that, for certain companies, would raise California’s corporate tax rate—already one of the highest in the nation—up to 22.26%. This amounts to an increase of approximately 150%, one of the steepest tax increases ever considered in California.
The bill requires that corporations with net income of $10 million or more be revised to instead impose a tax rate from 10.84% to 14.84%, or for financial institutions from 12.84% to 16.84%, based on the compensation ratio of CEOs to employees of the corporation.
It would further increase the tax rate by another 50% from publicly held corporations that have a specified decrease in full-time employees in the United States while increasing the number of contracted and foreign full-time employees.
The CalChamber has labeled SB 37 as a job killer because, if passed, California will have the highest corporate tax rate in the country, undoubtedly discouraging companies from locating to or further investing in the state.
Moreover, SB 37 will likely harm California workers, whose jobs will be jeopardized as companies try to counteract the costs of higher taxes by reducing their presence in California.