Should Tax Data Be Public Domain

[Symmetry]

It's not? Explain please.

Here's my opening post:

There was recently a proposal in the California legislature that would have disclosed the name, tax liaiblity, and other information of companies in California. It failed in the California senate 15-19.

Do people think that a company's tax information should be public knowledge (even if the company is not a public company)? If so, why or why not?

I don't see how they agree. Your post and your source say different things.

BILL NUMBER: AB 2439 AMENDED
BILL TEXT

AMENDED IN SENATE AUGUST 24, 2012
AMENDED IN SENATE AUGUST 16, 2012
AMENDED IN SENATE JUNE 20, 2012
AMENDED IN ASSEMBLY MAY 25, 2012
AMENDED IN ASSEMBLY MAY 2, 2012
AMENDED IN ASSEMBLY APRIL 11, 2012

INTRODUCED BY Assembly Member Eng
(Coauthor: Assembly Member Skinner)

FEBRUARY 24, 2012

An act to add and repeal Section 19573 of the Revenue and Taxation
Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 2439, as amended, Eng. Corporation taxes: disclosure.
The Personal Income Tax Law and the Corporation Tax Law impose
taxes on, or measured by, income. Existing law requires the Franchise
Tax Board to make available as a matter of public record each
calendar year a list of the 250 largest tax delinquencies in excess
of $100,000, and requires the list to include specified information
with respect to each delinquency.
This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,
as provided. This bill would also make findings and declarations
regarding the intent of the Legislature.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The Legislature finds and declares all of the
following:
(a) Publicly traded corporations are required to disclose their
federal and state corporation taxes to the federal Securities and
Exchange Commission through the Form 10-K. State corporation taxes,
however, are aggregated without regard to state, so the information
available at the federal level does not specify corporation taxes of
particular states.
(b) Recent changes in the state's Corporation Tax Law, which
provide for the elective use of single-sales factor apportionment,
combined with other provisions in this area of tax law, have had
little analysis and scrutiny with regard to their impact on taxpayers
and California.
(c) Therefore, it is the intent of the Legislature, in adding
Section 19573 to the Revenue and Taxation Code, to supplement federal
tax reporting requirements for those corporations filing a Form 10-K
by requiring the Franchise Tax Board to publish a list of the 500
largest corporate taxpayers filing a Form 10-K.
SEC. 2. Section 19573 is added to the Revenue and Taxation Code,
to read:
19573. (a) (1) (A) Notwithstanding any other law, on or before
December 1, 2013, and each December 1 thereafter, the Franchise Tax
Board shall publish on its Internet Web site a list of the 500
largest taxpayers subject to tax under Part 11 (commencing with
Section 23001), as measured by gross receipts, less returns and
allowances, that filed a Form 10-K with the federal Securities and
Exchange Commission for that taxable year. The list shall include the
name and tax liability of each taxpayer , any charitable
contributions made by the taxpayer, and whether the taxpayer
made an election to apportion its income in accordance with Section
25128.5.
(B) The determination of the taxpayers to be included on a list
shall be based on timely filed original tax returns for the taxable
year at issue. In the case of a taxpayer that is included in a
combined report, the determination to include that taxpayer on a list
shall be based on the gross receipts, less returns and allowances,
of the combined reporting group.
(2) The list published on or before December 1, 2013, shall
reflect the tax liability, as of October 1, 2013, for the 2010 and
2011 taxable years. Each subsequent annual list shall reflect the tax
liability for the taxable year that closed two years before the
publication of the list.
(3) For two years after the publication of a list, the Franchise
Tax Board shall, on or before December 1, update that list to reflect
any changes in the tax liability of each taxpayer as of October 1 of
that year.
(b) For purposes of this section:
(1) "Tax liability" means the amount of tax owed as a result of
the taxes imposed under Part 11 (commencing with Section 23001),
after the application of any credits and excluding overpayments,
estimated tax payments, withholding, and any other amounts paid.
(2) "Gross receipts" shall have the same meaning as set forth in
Section 25120.
(c) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

[thegreekdog]

Let's break it down (yeah baby!):

(1) TGD states "California proposal." It's a California proposal.
(2) TGD states "would have disclosed" the following: name (in red), tax liability (in blue), and other information (in green).

This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,as provided.

[BigBallinStalin]

Let's break it down (yeah baby!):

(1) TGD states "California proposal." It's a California proposal.
(2) TGD states "would have disclosed" the following: name (in red), tax liability (in blue), and other information (in green).

This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,as provided.

You can't trick me with your colorful description. I'll remain oblivious while I respond with the following irrelevant post:

[thegreekdog]

Let's break it down (yeah baby!):

(1) TGD states "California proposal." It's a California proposal.
(2) TGD states "would have disclosed" the following: name (in red), tax liability (in blue), and other information (in green).

This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,as provided.

You can't trick me with your colorful description. I'll remain oblivious while I respond with the following irrelevant post:

Oh, I thought you were going to not post in this thread for three days or so and then post again pretending you didn't read my post.

[BigBallinStalin]

Let's break it down (yeah baby!):

(1) TGD states "California proposal." It's a California proposal.
(2) TGD states "would have disclosed" the following: name (in red), tax liability (in blue), and other information (in green).

This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,as provided.

You can't trick me with your colorful description. I'll remain oblivious while I respond with the following irrelevant post:

Oh, I thought you were going to not post in this thread for three days or so and then post again pretending you didn't read my post.

Maybe I'll ignore what you just typed and then post in this thread three days later while pretending that I didn't read your post.

[Lootifer]

Yeah, like you're going to read it.

http://www.leginfo.ca.gov/pub/11-12/bil ... n_v93.html

Hahaha, yeh no thanks. I have to read electricity rules and regs enough as it is.

On topic though I think that other information seems fine, if im understanding apportionment correctly (ie where their money comes from). Again i support it with the clause that the information shouldnt be too detailed/granular.

[thegreekdog]

Yeah, like you're going to read it.

http://www.leginfo.ca.gov/pub/11-12/bil ... n_v93.html

Hahaha, yeh no thanks. I have to read electricity rules and regs enough as it is.

On topic though I think that other information seems fine, if im understanding apportionment correctly (ie where their money comes from). Again i support it with the clause that the information shouldnt be too detailed/granular.

Actually, apportionment is an interesting thing.

So, you know that the US federal government imposes an income tax on corporations based upon their income earned in the United States (for the most part, income earned overseas and brought into the United States may also be taxed). So, a company that makes $2 million in the United States is subject to tax on $2 million (at a rate of 35%).

The states also impose income taxes on corporations. These tax rates range from 4% to 10% (I believe Pennsylvania has the highest state tax rate at 9.99%, but Iowa may have a top graduated rate of 10%... I can't remember). Anyway, let's say the company makes $2 million in the United States and is subject to tax in 10 states, all of which have 10% tax rates. So, it pays $700,000 in U.S. federal taxes plus $200,000 in every state in which it is subject to tax (multiply that by ten and you get $2 million). So the company pays $2,700,000 of taxes on $2,000,000 of income. Unfair, right?

So states are required to allow corporations to apportion their income to the various states in which they do business. This is done through an apportionment fraction which, generally, is the following:

(1) Property in the state divided by property everywhere (the property factor)
(2) Payroll in the state divided by payroll everywhere (the payroll factor)
(3) Sales in the state divided by sales everywhere (the sales factor)
(4) Add the three fractions above and divide by 3 --> the resulting fraction or percentage is multiplied by the corporation's income, which results in "apportioned income" or income subject to tax in that particular state. You multiply this apportioned income by the tax rate, and get the tax.

There are likely only a handful of states that use this exact equation. Most states either weight the sales factor higher than the other factors. For example:

(1) Property in the state divided by property everywhere (the property factor)
(2) Payroll in the state divided by payroll everywhere (the payroll factor)
(3) Sales in the state divided by sales everywhere (the sales factor)
(3.5) Sales in the state divided by sales everywhere (the sales factor 2)
(4) Add the four fractions above and divide by 4.

Increasingly, states are going to merely a single sales factor (i.e. just #3).

States do this to give a competitive advantage to in-state companies, which attracts companies to that state. If I have 100% of my property, 100% of my payroll and 10% of my sales in State X, I pay a lot of tax in State X under a typical apportionment. If I just have to account for the sales factor, I pay much less tax. States want companies to build manufacturing plants or headquarters in their states, so they try to give an advantage to in-state companies.

[jimboston]

Possibly yes for publicly held / traded companies.

Making this a requirement for private businesses and firms is onerous and and invasion of privacy.
This would be akin to making this a requirement for every private individual.

Perhaps we should all wear badges with our total tax payout... so everyone can see what we pay. It would be interesting to be at a gathering, and hear people bitchin' about how the gov't doesn't "do for them"... then seeing that they pay near nothing in taxes.