California Cities Agree to Rein in Apple-Like Tax Windfalls

California cities will seek legislation to limit tax-sharing arrangements that give windfalls to a handful of cities and millions in public money to retailers like Apple Inc., Best Buy Co. Inc., and Williams-Sonoma Inc.

The League of California Cities has endorsed a plan to limit deals that hinge on e-commerce and a quirk in California’s sales tax rules sending the local portion of sales tax to the location where the transaction takes place, rather than where the customer lives.

The plan would end a years-long stalemate between cities such as Ontario, which has arrangements with the likes of Nike Inc. ...