SeeSALT Blog
On January 10, 2025, California Governor Gavin Newsom released his January Budget Proposal for the 2025 – 2026 fiscal year. Notably, Governor Newsom’s budget would increase tax revenue by requiring banks and financial corporations to move from an equally weighted three-factor formula, comprising property, payroll and sales factors, to a single-sales-factor formula for purposes of apportioning income to the state. Agricultural and extractive businesses would continue to use the three-factor formula. The proposed change would take effect immediately, beginning with tax year 2025.
In California Governor Releases 2025 Budget Proposal to Move Banks and Financial Corporations to Single-Sales-Factor Apportionment, colleagues Jeffrey Vesely, Zachary Atkins, and Jeff Phang explain more about the budget approval process.