LAEDC signs on in support of sales tax exemptions for manufacturers

By April 17, 2013 No Comments
April 15, 2013
The Honorable Lois Wolk
California State Senate
Chair, Senate Governance and Finance Committee
California State Capitol, Room 5114
Sacramento, CA  95814
Re: SB 376 (Correa) – Support
Hearing:  April 24
The Honorable Raul Bocanegra
California State Assembly
Chair, Assembly Revenue and Taxation Committee
California State Capitol, Room 4167
Sacramento, CA  95814
Re: AB 486 (Mullin) – Support
Hearing:  April 22


Dear Chairs:

For many decades, California has enjoyed a robust and productive manufacturing sector, the engine of the economy. Manufacturers in the state have created high wage jobs through a constant cycle of innovation and investment in new machinery and equipment.  As a result, we are among the most productive and energy efficient manufacturers in the world.  It is no surprise that other states and regions want what we have built over the last decades – manufacturers to propel their economies and employ their citizens in skilled jobs with high wages.

California manufacturers are diverse, with every type of product represented.   One constant feature is every manufacturer has a need for continual modernization to build new products, to meet environmental and safety standards, and to increase the skill level of its workforce.

The equipment needed to meet these needs can be very expensive with relatively long pay back.  The risks are high and investors are looking for locations that will provide the best outcomes.   With improvements in transportation and logistics, manufacturers increasingly have choices to locate facilities all over the country and the world.  Competition for manufacturers is fierce – other states and countries are attempting to lure investments and hiring to other locations.

How can we make sure California is on the short list for manufacturing investment that would succeed in the state?  To beat the competition we need to keep our tax and regulatory policies up to date to remove barriers to investment and hiring.

One obvious barrier to investment in California is the requirement that manufacturers pay sales tax on the purchase of manufacturing and R&D equipment.  Only five other states do not fully, or partially, exempt these purchases from payment of sales tax.  We must address this competitive disadvantage for California manufacturers and encourage them to invest and employ in California.

We urge your “yes” vote on SB 376 and AB 486.


Acclamation Insurance Management Services


Baxter Healthcare Corporation

Bishop-Wisecarver Corporation

Bayer HealthCare, LLC

California Business Properties Association

California Cement Manufacturers Environmental Coalition

California Chamber of Commerce

California Chapter of American Fence Association

California Concrete Contractors Association

California Fence Contractors’ Association

California League of Food Processors

California Manufacturers & Technology Association


Chemical Industry Council of California

Consumer Specialty Products Association

The Dow Chemical Company

Engineering Contractors’ Association

Flasher Barricade Association

General Mills

Intel Corporation

Inline Translation Services, Inc.

International Paper Company

Kimberly-Clark Corporation

Los Angeles County Economic Development Corporation

Marin Builders Association

National Aerosol Association

National Federation of Independent Business – California

Northrop Grumman Corporation

Novartis Pharmaceuticals Corporation

Owens-Illinois, Inc.

Paulson Manufacturing Corporation

PPG Aerospace

Praxair, Inc.

Procter & Gamble Company

Searles Valley Minerals

Solar Turbines Incorporated

SPI, The Plastics Industry Trade Association


Western Plastics Association


cc: The Honorable Lou Correa, Senator

The Honorable Kevin Mullin, Assemblymember

Members, Senate Governance and Finance Committee

Members, Assembly Revenue and Taxation Committee

Ms. Gayle Miller, Staff Director, Senate Governance and Finance Committee

Mr. Scott Chavez, Gov., and Finance Consultant, Senate Republican Caucus

Ms. Oksana Jaffe, Chief Consultant, Assembly Rev. and Taxation Committee

Ms. Julia King, Revenue and Taxation Consultant, Assembly Republican Caucus