CalChamber Urges Governor to Sign Manufacturing Tax Credit Proposal

SupportA California Chamber of Commerce-supported bill that promotes investment in the next generation of manufacturing and encourages production in California awaits action by the Governor.

The proposal, AB 1951 (Grayson; D-Concord), expands investment and production in California by expanding the sales and use tax exemption for the purchase of manufacturing and research and development (R&D) equipment.

Manufacturing Tax Credit Expansion

Thirty-eight states already fully exempt manufacturing equipment purchases from sales and use tax, and another five states do not have a state sales tax. 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.

AB 1951 will make California competitive with the states that already exempt manufacturing equipment from sales and use tax, and through this exemption, California can provide more opportunities for growth, innovation, and high-quality jobs that come from increased investments in California manufacturing.

With tremendous ripple effects throughout the economy, each manufacturing job supports at least 2.5 other jobs in the workforce. AB 1951 will provide manufacturers the opportunity to continue to lead and compete in a domestic and global economy that operates on razor-thin margins. This bill will facilitate further innovation, production of wide-ranging goods, and provide high-quality jobs throughout California’s regionally diverse economies.

Action Needed

The CalChamber is asking businesses to contact the Governor and urge him to sign AB 1951.

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.