By the SEMA Washington, D.C., office
The California legislature passed SEMA-supported legislation (AB 52), introduced by Assembly Member Tim Grayson (D-Concord), which would provide businesses with a state tax credit equal to what they pay in local sales tax for qualified manufacturing equipment. The bill now goes to Governor Gavin Newsom for approval or veto.
SEMA members are encouraged to register for support for the bill here.
Manufacturing is a vital industry in California, accounting for more than 10% of the state’s GDP and employing nearly 8% of the state’s workforce. The automotive aftermarket alone employs nearly 150,000 people and contributes more than $40 billion to the state’s economy. Thirty-eight states already offer sales-tax exemptions on manufacturing equipment and R&D. By failing to do the same, California risks losing businesses to these states, which can provide a more attractive business environment. In addition, providing incentives for manufacturing and R&D can help the state attract new businesses and create jobs.
The bill’s progress to date shows the importance of SEMA’s champions in statehouses nationwide. Assembly Member Grayson is a SEMA State Automotive Enthusiast Leadership Caucus member and was the 2019 winner of SEMA’s Stephen B. McDonald Legislator of the Year award. In addition to being a lawmaker, Assembly Member Grayson, along with his wife Tammy, is also an enthusiast, with two classic Ford Mustangs in their collection.
For more information, please get in touch with Christian Robinson, SEMA’s senior director for state government affairs and grassroots, at christianr@sema.org.