Remember when the California Manufacturing Sales Tax Exemption first came into fruition, on July 1, 2014? It seems like so long ago. But maybe it’s a good time to remind companies about this useful partial exemption available to manufacturing companies.
What exactly is this exemption?
It allows certain manufacturers and biotech companies to exempt a portion of California sales and use tax on purchases of qualified equipment used in manufacturing and R&D (research and development).
This exemption went into effect July 1, 2014 and applies to any sale, purchase, and lease of qualified tangible personal property on or after this date. The exemption was formerly set to sunset on July 1, 2022. However, the Governor of California recently signed Assembly Bill (A.B.) 398, which extends the exemption for manufacturing and research and development equipment to July 1, 2030. The bill has also expanded the exemption to include additional companies (see below).