There are many areas of California law that are complex and difficult for even public policy experts to understand, let alone lay people like me. For example, try to discuss the finer details of Prop. 98 funding with even the most seasoned Capitol staff person, and you might quickly find their eyes, along with your own, glazing over. Another very challenging area of state policy to digest is how multi-state businesses pay taxes in California. Because some of these topic areas are so convoluted and confusing, we often just look to people who sound like experts to summarize them and help guide us through the public policy maze in search of ferreting out good ideas from poor ones.
For several years I have been writing at a cursory level about how multi-state businesses pay their taxes in California — we’ve all seen the broad descriptions “multi-factor apportionment,” “elective single sales factor,” and so forth. In this column I am going to do my best to really explain this issue of how California taxes multi-state businesses, for two reasons. The first, and I will elaborate further, is that up to this point I have been pretty… Read More