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.
Sincerely,
Acclamation Insurance Management Services
Anheuser-Busch
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
Caterpillar
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
TechAmerica
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