California - Sales and use tax exemption for manufacturing; repeal of tax incentives; new hiring credits 

July 10:  Legislation pending the governor’s signature would, once enacted, make significant changes to California’s credits and incentives programs, and would adopt a new partial sales and use tax exemption for certain property used in manufacturing, processing, and R&D activities.

The exemption only applies to certain state-level components of California’s sales and use tax that total 4.19% of the overall 7.5% statewide sales and use tax rate.

A summary of the legislation is provided in a report prepared by KPMG’s State and Local Tax practice (also provided is a list of “frequently asked questions” and taxpayer action steps in the KPMG observation).

Read the July 2013 report [PDF 250 KB].

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