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Bill Designed To Avoid Fights Over Sales-Tax Sources Passes Senate
Capitol Alert

SACRAMENTO (AP) -- Legislation that tries to eliminate cutthroat competition between neighboring communities for sales tax revenue is one step from the governor's desk.

The bill would prohibit local governments from offering financial incentives to lure away car dealers or major retail stores from nearby communities, unless the government that gets the new business offers to share the additional sales taxes revenue with the agency that lost the income.

Competition among local governments for auto dealerships and major department stores is fierce because of the sales tax revenue those businesses generate.

Supporters of the bill, by Assemblyman Tom Torlakson, D-Martinez, say that offering subsidies to take encourage businesses to move hurts the losing community without helping the economy in that region.

The Senate approved the bill Thursday without debate, 33-0. It now moves to the Assembly for a vote on Senate amendments..

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