Newsom Wants to Change Tax Rule for Banks That Lacks Rationale

California Gov. Gavin Newsom’s proposal to change tax treatment of banks and financial institutions would end rules without a clear justification that have been in place since 2012, according to state budget advisers.

The proposal is part of the Democratic governor’s budget plan for the next fiscal year that starts July 1. Lawmakers are debating the plan and must approve it by mid-June. The Assembly Budget Subcommittee on State Administration discussed the proposal on Tuesday.

Nearly all multistate businesses have been required to use single sales factor apportionment since California adopted it in 2012. Under ...