AB 1951 Critical for California’s Economic Future; Each Manufacturing Job Supports 2.5 Other Jobs

SupportThe California Chamber of Commerce is urging approval of AB 1951, a tax credit bill that will promote investment in the next generation of manufacturing and encourage production in California. The measure — unopposed to date — faces a final vote as early as today in the State Senate and if it passes out of that house, it will face one final vote in the Assembly due to amendments that were made in the Senate.

AB 1951 (Grayson; D-Concord) will improve California’s business climate and create jobs here through a sales and use tax exemption for the purchase of manufacturing and research and development (R&D) equipment.

“When this bill is passed and signed into law, it will be great news for California’s economic future,” said CalChamber Policy Advocate Preston Young.  “The tax credit expansion in AB 1951 will encourage companies to grow here and invest in California manufacturing.  The bill sends the proper signal to manufacturers that California is serious about retaining and attracting high-quality jobs and production.”

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. Thirty-eight states already fully exempt manufacturing equipment purchases from sales and use tax while California does not.

California’s manufacturing industry experienced only 3% job growth in the last decade while U.S. manufacturing flourished with 11% growth. At the same time, California attracted no more than 1% of the country’s large manufacturing investments, according to data from Site Selection Magazine.  With tremendous ripple effects throughout the economy, each manufacturing job supports at least 2.5 other jobs in the workforce.

“Policymakers should be focused on the importance of AB 1951 as a way to attract innovation, create good jobs and ensure California remains competitive with other states,” said Young.

Staff Contact: Preston Young

Preston R. Young joined the California Chamber of Commerce in October 2019 as a policy advocate, specializing in health care policy and taxation issues. He was named a senior policy advocate starting January 1, 2024 in recognition of his efforts on behalf of members. Young came to CalChamber from Schuering Zimmerman & Doyle, LLP, where he specialized in medical malpractice, health care, product liability and elder abuse litigation. Young holds a B.A. in communications from Saint Mary’s College of California, and earned a J.D. from Golden Gate University School of Law, where he was associate editor of the Environmental Law Journal. See full bio.