The Senate Appropriations Committee voted unanimously August 11 to approve AB 1951 (Grayson), a bill co-sponsored by CalTax and the California Manufacturers and Technology Association (CMTA) to provide a full sales and use tax exemption for manufacturing and research-and-development equipment purchases up to $200 million.

The committee’s bipartisan 7-0 vote sends the bill to the Senate floor. If the Senate approves AB 1951, the bill will return to the Assembly for a vote on amendments made in the Senate. To reach the governor’s desk, the measure must clear both houses before the Legislature adjourns August 31.

The Assembly voted 74-0 to approve an earlier version of the bill. The Senate amendments changed the effective dates of the exemption to December 31, 2022, through December 31, 2027, and removed requirements that the Joint Legislative Budget Committee and the Department of Finance prepare annual estimates of revenue changes caused by the exemption.

There have been no opposing votes cast during AB 1951’s trip through the Legislature.

“Within the California economy, manufacturing plays a crucial and essential role, supporting high-wage jobs and small businesses …,” Assembly Member Tim Grayson wrote in a letter to the Appropriations Committee. “AB 1951 will incentivize long-term investments and fuel growth in the manufacturing industry in California by providing a full state and local sales and use tax exemption for the purchase of manufacturing equipment. Ultimately, manufacturers will be able to grow, hire and train skilled workforces for the future and provide high-wage jobs for Californians.”