The California legislature passed SEMA-supported legislation (AB 52), introduced by Assembly Member Tim Grayson (D-Concord), which would provide businesses with a state tax credit equal to what they pay in local sales tax for qualified manufacturing equipment. The bill now goes to Governor Gavin Newsom for approval or veto. SEMA members are encouraged to register for support for the bill here.
Manufacturing accounts for more than 10% of the state’s GDP and employs nearly 8% of the state’s workforce, SEMA stated in a news release. The automotive aftermarket alone employs nearly 150,000 people and contributes more than $40 billion to the state’s economy. Thirty-eight states already offer sales-tax exemptions on manufacturing equipment and R&D.
By failing to do the same, California risks losing businesses to these states, which can provide a more attractive business environment, according to SEMA. In addition, providing incentives for manufacturing and R&D can help the state attract new businesses and create jobs.
For more information, contact Christian Robinson, SEMA’s senior director for state government affairs and grassroots, at christianr@sema.org.