AB 600: Sales and use taxes: exemption: manufacturing and research: useful life: electric power generation.

Existing sales and use tax laws impose taxes on retailers measured by gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, measured by sales price. Those laws partially exempt from those taxes, for a specified period, until July 1, 2018, the gross receipts from the sale of, and the storage, use, or other consumption of, specified tangible personal property purchased for use by a qualified person, as defined, to be used primarily in manufacturing or other processes, and in research and development. Consumables with a useful life of less than one year do not qualify for exemption, and useful life is defined by reference to state income or franchise taxes.

This bill bill, on and after January 1, 2018, and before July 1, 2028, would additionally define useful life by reference to manufacturer or other warranties, maintenance contracts, and normal replacement as established by industry or business practices and practices, would provide that those definitions would apply on and after July 1, 2014. The bill, for taxable years beginning on and after January 1, 2018, and before July 1, 2030, would additionally exempt from those taxes special purpose buildings and foundations used for the generation, production, storage, or distribution, as defined, of electric power power, and would expand the definition of qualified person to include, among others, a person primarily engaged in the business of electric power generation. The bill would declare the intent of the Legislature to enact legislation that would improve the states sales and use tax incentives to promote a stronger California economy by securing a greater share of the high-paying, high-skilled jobs in manufacturing and research and development. The bill would also make various findings and declarations.