California – Advanced Manufacturing Bill Signed by Governor

SALT Report 1753 – On September 6, 2012 Governor Brown signed SB 1128 a bill that extends a sales and use tax exemption offered by the California Alternative Energy and Advanced Transportation Financing Authority (CAETFA) to businesses in the advanced manufacturing sector. The exemption is limited to advanced manufacturers that improve upon or create entirely new materials or products and are involved in the following industries:

  • Aerospace,
  • Micro and nanoelectronics,
  • Biotechnology,
  • Computer technology,
  • Medical device manufacturing,
  • Integrated computational materials engineering,
  • Metal fabrication,
  • Transportation,
  • Additive manufacturing, and
  • Industrial biotechnology

The bill was authored by Senator Alex Padilla (D-Pacoima) and is designed to encourage investment, job creation, and economic growth in California.  Currently, California is one of three states that impose tax on purchases of manufacturing equipment, and Senator Padilla says, “This practice is counterproductive and undermines the state’s efforts to attract and retain manufacturing firms and create jobs. I authored this bill because California is uniquely positioned to benefit from high tech jobs coming back to the United States. We are a leader in innovation. We need to make California attractive to the manufacturing sector as well.”

Since 2010, CAEATFA has generated $10 million dollars in private investments for every $1 million it spends and has helped to create more than 7,300 jobs in the state.

The exemption is effective January 1, 2013.

For Further Information:

California State Legislature – SB 1128

California State Treasurer – CAEATFA