Correa’s SB 376 will give tax credits to California’s manufacturers

TAX CREDITS FOR CALIFORNIA MANUFACTURERS CLEARS FIRST HURDLE

State Senator Lou Correa, April 24, 2013

Sacramento, CA –Supported by coalition of state-wide manufacturers, local agencies, and independent businesses, State Senator Lou Correa (D–Santa Ana) announced the passage of Senate Bill 376 from the Senate Governance and Finance Committee.

“Manufacturing in California is in a crisis and I applaud the members of the committee for recognizing the need to incentivize businesses to remain and expand in California,” said Correa. “SB 376 is about keeping businesses open and people working,” added Correa.

Under existing law, California companies are required to pay sales on the purchase of manufacturing and research and development equipment and supplies at the standard rate, without any incentives or tax credits. Since 2001, California’s manufacturing sector lost 34 percent of its job base and has fallen behind other states in the rate of manufacturing investments, capturing only 1.9 percent of manufacturing start-ups or expansions. Once enacted, SB 376 will exempt taxpayers from paying sales and use tax on the purchases of machinery and equipment used in manufacturing.

Testifying in support of SB 376 was Dorothy Rothrock, Vice President of the California Manufacturing and Technology Association, “California’s manufacturing sector is very diverse and contributes a variety of benefits to the state and local economy. Yet, competition for manufacturing is fierce, as other states seek to lure investments and employment. Manufacturing and job growth will continue to lag unless California creates an attractive climate for manufacturing investment. SB 376 will help level the playing field with California’s competitors and sends a strong message: California wants productive and innovative manufacturing to prosper,” said Rothrock.

SB 376 unanimously passed out of the Senate Government and Finance Committee without any “no” votes and now is scheduled to be heard in the Senate Appropriations Committee.

SB 376 is sponsored by the California Manufacturers and Technology Association and supported by manufacturers across California including Kimberly-Clark Corporation and International Paper Company, which together employ over 800 in Orange County.

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