Council Supports Tax Exemption for Manufacturing, R&D Equipment

California’s economic competitiveness would get a big boost under legislation (SB 1951, Grayson) the Bay Area Council is supporting to exempt manufacturing and research and development equipment from sales and use taxes. California would join 38 other states that already provide full exemption from sales and use taxes. Through this exemption, California can provide more opportunities for growth, innovation, and high-quality jobs that come from increased investments in California manufacturing. SB 1951 will be heard next week by the Assembly Revenue and Taxation Committee.

California’s manufacturing industry remains at the forefront of global leadership and innovation, but the industry hasn’t kept pace with the rest of the country in job growth and investments. California’s manufacturing industry experienced only 3 percent job growth in the past decade while U.S. manufacturing flourished with 11 percent growth. At the same time, California attracted no more than 1 percent of the country’s large manufacturing investments, according to data from Site Selection Magazine. AB 1951 will send the proper signal to manufacturers that California is serious about retaining and attracting high-quality jobs and production.