California Bill Would Boost Investment in the State
Commentary
The key to economic growth is investment in new businesses and jobs. But all investments are risks. You might make a lot of money—or lose it all. The way to boost investments is to reduce risks. One way to do so is to cut taxes to boost profits.
That’s the idea behind Assembly Bill (AB) 52, by Assemblyman Timothy Grayson (D-Concord). It’s important the bill is sponsored by a Democrat. That gives it a better chance of passing.
From 2024 to 2028, AB 52 would exempt manufacturing and research equipment from the state sales and use tax.
As the bill itself notes, 38 states “fully exempt manufacturing equipment from sales and use tax. With California’s current partial exemption, taxpayers pay more to buy equipment in California than they would elsewhere, creating a competitive disadvantage for the state. … California has the highest state-level sales tax rate among the 50 states in the United States, and after local rates are accounted for, sales and use tax rates in California can reach up to 10.75 percent.”…