Legislation to fully exempt most California manufacturing and research-and-development equipment from sales tax was unanimously approved May 5 by the Assembly Revenue and Taxation Committee.

AB 1951 (Grayson), co-sponsored by CalTax and the California Manufacturing and Technology Association, received support from Democrats (including Assembly Member Jacqui Irwin, the committee chair), Republicans, and Assembly Member Chad Mayes, the only state lawmaker who isn’t registered with any political party.

Along with expanding the current partial exemption to be a full exemption from state and local sales and use taxes, AB 1951 would eliminate – from 2023 through 2028 – the cap that limits the current partial exemption to equipment purchases under $200 million.

The committee took testimony from CalTax and other supporters of the bill during its April 25 hearing, and there was no additional testimony at this week’s hearing.

“This legislation is a vital step toward making California more competitive with other states that are luring our manufacturing jobs away,” CalTax President Robert Gutierrez said. “We want to see ‘made in California’ become the norm, and AB 1951 takes us in that direction. This simple tax policy change will lead to more job opportunities for Californians, and economic expansion that will lead to more long-term revenue growth.”