Sales and use taxes: exemption: manufacturing.

The Sales and Use Tax Law imposes a tax on retailers measured by the 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. That law provides various exemptions from those taxes. The bill would exempt from those taxes, on and after January 1, 2014, and before January 1, 2020, the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased by a qualified person for use primarily in the manufacturing process, as specified, for use in research and development, as specified, or for use in air pollution mitigation, as provided. This bill would also exempt the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased for use by a contractor for specified purposes. This bill would require the Legislative Analyst's Office to complete and distribute a report to the Legislature on the effect of this exemption by January 1, 2019. The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Exemptions from state sales and use taxes are incorporated into these laws. This bill would specify that this exemption does not apply to local sales and use taxes, transactions and use taxes, and specified state taxes from which revenues are deposited into the Local Public Safety Fund, the Local Revenue Fund, or the Fiscal Recovery Fund. This bill would take effect immediately as a tax levy.