Bill > AB856

This bill extends a sales and use tax exemption for qualified manufacturing and research equipment from July 1, 2030 to January 1, 2031, and extends the overall repeal of the law from January 1, 2031 to January 1, 2036. The exemption applies to tangible personal property used primarily in manufacturing, processing, refining, fabricating, recycling, or research and development, with a $200 million annual purchase limit. The bill removes previous reporting requirements by the California Department of Tax and Fee Administration (CDTFA) to the Joint Legislative Budget Committee and Department of Finance. Instead, if requested by the Legislature, the CDTFA would now prepare a report detailing the tax revenue not collected, the cost of administering the exemption, and the number of businesses using it. The bill aims to attract more manufacturing investment and jobs to California. Importantly, the bill specifies that the state will not reimburse local agencies for any sales and use tax revenues lost due to this exemption. The bill takes effect immediately as a tax levy and is designed to provide continued tax relief for qualified manufacturing and research businesses.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB856