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A pair of bills labeled “Job Killers” by the California Chamber of Commerce would enact a tax on revenue from digital advertising. Photo via Joshua Earle on unsplash.com

published on May 21, 2024 - 1:34 PM
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California legislators remain busy introducing bills that will have an impact on the business community.

The California Chamber of Commerce has added to its list of Job Killers that business owners might want to track through the year.

The list may change as key deadlines pass, including today’s deadline for legislation to move out of committee.

Tax on digital advertising

AB 2829 (Diane Pana; D-San Mateo)

SB 1327 (Steve Glazer; D-Contra Costa)

AB 2829 would implement a 5% tax on digital ads. SB 1327 would create a 7.25% tax on the revenue generated from the sale of digital advertising.

This bill targets firm that annually make at least $2.5 billion of revenue from these services.

The CalChamber opposed AB 2829 because it would enact an “unconstitutional” digital ad tax on California’s employers. The bill may hurt businesses of all sizes and explains that the state will fiscally target employers operating in California.

AB 2829 aims to tax businesses with annual global revenue of at least $100 million at a rate of 5% of the revenue derived from digital ad services. The bill is nearly identical to Maryland’s digital ad tax, which was signed into law in 2020.

Organizations opposing this bill include the Family Business Association of California, the California Retailers Association, and various chambers of commerce in the state.

The tax increase proposed in SB 1327 will be separate from and in addition to income taxes already paid on income generated from sales of digital advertising. Assessing this tax may drive costs higher for Californians since the platforms paying the tax will build those costs into the products they offer to offset the new expense.

“This bill punitively targets only a handful of taxpayers that sell digital advertising, yet will financially cripple many, many small and medium-sized businesses,” said CalChamber Senior Policy Advocate Preston Young. “The brunt of this tax will ultimately be borne by smaller employers that rely on advertising to increase the reach of their business.”

Displaced janitors

AB 2374 (Matt Haney; D-San Francisco)

Assembly Bill 2375 would redefine the term “contractor” to mean any person that hires janitor employees through a service contract.

Under current law, the Displaced Janitor Opportunity act requires contractors and subcontractors that use janitorial or building maintenance services at a job site to retain certain employees that worked at the site for a previous contractor or subcontractor for 60 days.

If passed, that period would be expanded to 90 days.

It would also require a succeeding contractor or subcontractor to maintain the work schedules, wages and benefits as the prior contractor or subcontractor.

The CalChamber opposes the bill, saying it imposes new statutory joint liability on businesses of any size that contract for janitorial services, and will place new mandates on the businesses that should be applied to the contractor.

According to the author of the bill, there are current laws that protect workers after they’ve been working for an employer after a certain numbers of years,  but that they can be exploited, such as when X, formerly known as Twitter, laid off its janitors when it was doing its mass layoffs in 2022.

He said his bill is a much needed update to the Displaced Janitor Opportunity Act.

Ban use of PFAS

SB 903 (Nancy Skinner; D-Berkeley)

If passed, this bill by 2030 would state the intent of the California Legislature to enact subsequent legislation to phase out the sale of products with avoidable perfluoroalkyl and polyfluoroalkyl substances (PFAS).

PFAS are in everyday products, including waterproof jackers, food packaging and nonstick pans. It has been linked to several harmful health impacts and has contaminated drinking water sources across the country.

Commencing Jan. 1, 2025, existing law prohibits the manufacture, distribution, sale or offer of any new textile articles that contain regulated PFAS.

The Department of Substance Control can be petitioned to affirm that the PFAS in a product is an unavoidable use.

It would also prohibit them from being used in food packaging and cosmetic products.

PFAS linger in the environment for hundreds of thousands of years, leading to the term “forever chemicals.”

On her website, Skinner says that California will end the use of “unnecessary” forever chemicals and reduce the threats they pose to public health and the environment.

The CalChamber opposes the bill, stating that since PFAS are used so widely, the regulatory program is unworkable and will lead a ban on important products, or otherwise make them less safe.

Environmental rights

ACA 16 (Isaac Bryan; D-Los Angeles)

This measure would amend the state’s constitution to declare that people have a right to clean air and water and a healthy environment.

In its opposition, the CalChamber states it has far-reaching and negative consequences that would impair government operations, stunt development for new housing and infrastructure, as well as clean energy project development.

If passed, the CalChamber stated it has potential to destabilize the state’s economy.

Algorithm collusion

SB 1154 (Melissa Hurtado; D-Sanger)

SB 1154, The California Preventing Algorithmic Collusion Act of 2024, would allow the attorney general to request written reports on pricing algorithms.

Pricing algorithm refers to any computational process, including ones from artificial intelligence, that recommend or set a price or commercial term on a service or product.

It would prohibit a person from using or distributing any pricing algorithm that uses or was trained with nonpublic competitor data — data that is derived or provided by another person that competes in the same market as a person, or a related market.

CalChamber claims that the bill is unnecessary as collusion is already illegal under existing law.

The CalChamber says the bill creates confusion and uncertainty for businesses as to what is a lawful pricing algorithm as opposed to price fixing because of vague and overbroad standards.

They claim it imposes onerous reporting requirements and grants the attorney general the authority to request reports on a business’s pricing algorithm even if they have not been alleged to have behaved anticompetitively or harmed consumers.

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