Posted by: News_Desk on 02/01/2017 02:54 PM
Updated by: News_Desk on 02/01/2017 02:54 PM
Expires: 01/01/2022 12:00 AM
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Senator Gaines Introduces Bill To Help Businesses Save Money
Sacramento, CA...Senator Ted Gaines (R-El Dorado) today announced Senate Bill 13, which will provide much-needed tax relief to the manufacturing, research and development, software and agricultural industries by expanding an existing sales and use tax exemption.
“Small businesses are the backbone of California’s economy and we need to do everything we can to make sure they capitalize on any available tax break,” said Senator Gaines. “I will continue to push for lower taxes and simpler, less burdensome regulations to let employers know that California is open for business in order to get our economy back on track.”
Existing law allows manufacturers and research and development companies a sales and use tax exemption for their qualifying tangible personal property purchases up to $200 million a year. This includes property such as machinery and equipment used for manufacturing activities. Property that is considered to have a useful life of less than one year is excluded.
Senate Bill 13 seeks to expand the definition of businesses eligible to receive this exemption by including software publishers and others who conduct agricultural business activities. It will also increase the annual property purchase limit from $200 to $500 million a year. Finally, it will define property as having a useful life of one or more years if the property includes a warranty for one or more years.
Senator Gaines introduced this bill on the heels of recent reports indicating that the existing tax exemption has been severely underutilized. Since its inception on July 1, 2014 through September 30, 2016, businesses utilizing the exemption were only 21 percent of the original estimates made by the Department of Finance and Board of Equalization.
“My hope is that by clarifying and expanding the exemption, that more businesses will be able to take advantage of it,” said Senator Gaines. “Businesses should be rewarded for their contributions to our state, not continually penalized at every turn. I’m going to let them keep more of the money they earn instead of shipping it to an unaccountable Sacramento.”
Senator Ted Gaines represents the 1st Senate District, which includes all or parts of Alpine, El Dorado, Lassen, Modoc, Nevada, Placer, Plumas, Sacramento, Shasta, Sierra and Siskiyou counties.
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