California – Out-of-State and Overseas Entities Eligible for CAEATFA Exclusion

SALT Report 3079 – The California Legislature passed a bill that clarifies the definition of “participating party” for purposes of the sales and use tax exclusion provided by the California Alternative Energy and Advanced Transportation Financing Authority.  CAEATFA provides an exclusion from tax for purchases of tangible personal property used for the design, manufacture, production, or assembly of advanced transportation technologies, and alternative source products, components, or systems.

According to the provisions of Assembly Bill 1422, “an entity located outside of the state, including those located overseas, is considered to be a participating party and is eligible to apply for financial assistance if the participating party commits to, and demonstrates that the participating party will be opening a manufacturing facility in the state.”  Prior to the amendment, the exclusion was limited to entities located in California.

In addition, the term “project” has been redefined to include machinery and equipment utilized in California, and tangible personal property that is utilized in California for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems.

The provisions in AB 1422 are effective January 1, 2014.

For Further Information

California State Legislature – Assembly Bill 1422, Laws 2013