CONS §SEC. 26: (a) Taxes on or measured by income may be imposed on persons, corporations, or other entities as prescribed by law.

(a) Taxes on or measured by income may be imposed on persons, corporations, or other entities as prescribed by law. (b) Interest on bonds issued by the State or a local government in the State is exempt from taxes on income. (c) Income of a nonprofit educational institution of collegiate grade within the State of California is exempt from taxes on or measured by income if both of the following conditions are met: (1) The income is not unrelated business income as defined by the Legislature. (2) The income is used exclusively for educational purposes. (d) A nonprofit organization that is exempted from taxation by Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code or Subchapter F (commencing with Section 501) of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, or the successor of either, is exempt from any business license tax or fee measured by income or gross receipts that is levied by a county or city, whether charter or general law, a city and county, a school district, a special district, or any other local agency.