Law & Order

California Governor Vetoes Manufacturing Equipment Sales Tax Exemption Bill

By SEMA Washington, D.C., Staff

California Governor Gavin Newsom vetoed a SEMA-supported bill (AB 1951) that would have provided a full sales and use tax exemption for the purchase of manufacturing and research and development (R&D) equipment not exceeding $200 million.

If enacted, the exemption would have changed the current, narrowly applied exemption, and focused on improving cost competitiveness to spur investment in California. Accounting for both local and state taxes, California’s ranks among the highest tax rates in the country.

In his veto message, Gov. Newsom noted that while he supported the intent of the bill, it would have resulted in significant tax revenue losses for local governments, potentially imperially other essential services, such as health, safety, welfare and transportation services.

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