Bill > SB587

This bill introduces a tax credit for businesses that paid sales or use taxes on certain tangible personal property that would have been exempt from taxation if not for local sales and use taxes. Specifically, for tax years 2026-2030, the bill allows both personal income and corporate taxpayers to claim a credit equal to the sales tax reimbursement or use taxes paid on qualifying manufacturing, recycling, or research and development equipment. The credit can be carried forward for up to eight years if it exceeds the taxpayer's tax liability. The California Department of Tax and Fee Administration can share information with the Franchise Tax Board to administer the credit, and the Department of Finance must provide annual estimates of potential revenue loss to legislative budget committees. To receive the credit, taxpayers must file it on their original tax return, and the credit will only be available for years when the Legislature specifically appropriates funds for its administration. The bill aims to encourage investment in California's manufacturing and research sectors by providing tax relief for businesses purchasing qualifying equipment. The tax credit is set to expire on December 1, 2031, with a full repeal on January 1, 2034, and requires detailed reporting on its implementation and effectiveness.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB587