Manufacturing Sales Use Tax Exemption
A new law beginning on July 1, 2014 allows manufacturers and certain research and developers to obtain a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases. To be eligible under this law, you must meet all three of these conditions:
- Be engaged in certain types of business, also known as a “qualified person.”
- Purchase “qualified property.”
- Use that qualified property for the uses allowed by this law.
The list of criteria to qualify for the manufacturing exemption can be quite complex. We suggest you take the time to determine if your business and purchases or leases qualify, click here for qualifications.
Get it in Writing
Tax and fee laws can be complex and difficult to understand. If you have specific questions about this exemption and who or what qualifies, we recommend that you get answers in writing from the California State Board of Equalization (BOE). This will enable you to get the best advice and will protect you from tax, penalties and interest in case you are given erroneous information. Requests for written advice can be emailed to the Board of Equalization (BOE) or mailed directly to:
State Board of Equalization
P.O. Box 942879
Sacramento, CA 94279
For more details, please see publication 8, Get It in Writing!
If You Need Help
If at any time you need assistance feel free to contact the California State Board of Equalization. BOE staff is developing a proposed regulation for consideration by elected Board members to help businesses understand what manufacturing equipment qualifies for the sales tax exemption.
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