Green Operations

CALSTART Praises Deal to Exempt Clean Tech Manufacturing Equipment from State Sales Tax

March 24, 2010

PASADENA, CA - CALSTART, the nation's leading clean transportation consortium, praised a deal between the California Governor and the state's legislative leaders to exempt manufacturing equipment to produce clean energy and technology products, vehicles, and fuels from the state sales tax. 

California is one of only three states that tax capital equipment used to manufacture other products. The new legislation (SB-71) exempts clean tech manufacturing equipment from the state sales tax. 

Governor Schwarzenegger outlined the need for such legislation in his state-of-the state speech and was then able to negotiate a bi-partisan deal successfully with State Senate President pro Tem Darrell Steinberg and newly elected Assembly Speaker John Perez.  CALSTART participated in press events with the Governor and helped organize support for the legislation from several California clean transportation technology companies.

"With the passage of this legislation, California's leaders have removed a major barrier to the growth of the state's clean energy industry. This legislation will stimulate the creation of thousands of jobs in California," said John Boesel, CALSTART's President and CEO, a statewide organization that serves as a catalyst for the clean transportation technology sector.

"Clean energy and transportation are priorities that are important to both Republicans and Democrats. We appreciate the cooperative, bipartisan effort made by Governor Schwarzenegger, President pro Tem Steinberg, and Speaker Perez to reach agreement on this policy. This is definitely a policy that will be good for the environment and the economy," said Boesel.

California has long been a national and global leader in terms of policies that have resulted in cleaner fuels and vehicles that benefit the environment and public health. However, the sales tax on manufacturing equipment often served as a significant disincentive for firms to actually produce products in-state. Unlike other factors such as obtaining permits and work rules, the sales tax on manufacturing equipment was a clear and easy-to-quantify hindrance for doing business in California.

"California has taken the right policy steps to clean up cars, trucks, and buses.  This legislation is the right step to give California a fighting chance at making sure the next generation of clean vehicles and fuels are built in the state," said Boesel.

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