Sales and use taxes: zero-emission vehicle fueling or charging.

The exemption in paragraph (6) changed from covering property 'used primarily in the fueling of an electric vehicle' to property 'used exclusively in the processing, altering, or other preparation required for converting or conditioning hydrogen or electricity for the fueling of a zero-emission vehicle.' This raises the usage threshold from 50% to 100% and narrows the covered activity.

New exclusions in paragraphs (6)(B) and (7)(B) state that the exemption does not apply to qualified tangible personal property purchased for the production of hydrogen fuel from raw materials, including natural gas and fossil fuel feedstocks. This excludes gray and brown hydrogen production equipment from the tax break.

NAICS code 447190 (Other Motor Vehicle Dealers) was removed from the qualified person definition for the period on and after January 1, 2018 through before January 1, 2027, narrowing which businesses qualify during that timeframe. The code remains available starting January 1, 2027.

A new category (vi) of qualified tangible personal property was added covering charging station equipment and component parts, including chargers or dispensers, power cabinets, underground conduits, transformers, switchgear or switchboards, energy storage systems, meters, cables and connectors, safety systems, and associated operating structures.

The backfill requirement (which mandates transferring an amount equal to the estimated revenue loss from the Greenhouse Gas Reduction Fund to the General Fund) now does not apply to the additional exemptions for ZEV fueling equipment. This means the state will not recoup the revenue lost from these new tax breaks.

The bill's title and digest changed from 'electric zero-emission vehicle fueling' to 'zero-emission vehicle fueling,' removing the redundant word 'electric.'

The state-mandated local program designation changed from 'no' to 'yes' in the legislative digest, indicating the bill now imposes obligations on local agencies.

The bill's scope is broadened from 'zero-emission vehicle fueling' to 'zero-emission vehicle fueling or charging,' explicitly covering electric vehicle charging stations alongside hydrogen fueling infrastructure.

A new definition of 'processing' takes effect July 1, 2027, expanding the term to include the altering, converting, conditioning, or other preparation of hydrogen or electricity for selling hydrogen for fueling or electricity for charging a vehicle. This brings EV charging equipment within the existing manufacturing/processing tax exemption framework.

The 'qualified person' definition is restructured. The old version used three time-based tiers with NAICS 2012 codes (adding codes 447110 and 447190 on January 1, 2027). The new version uses two categories: the original manufacturing/utility codes plus a new category for persons in NAICS 2022 Codes 457110 (Gasoline Stations with Convenience Stores) and 457120 (Fuel Dealers), effective July 1, 2027 instead of January 1, 2027.

A new exclusion is added to 'qualified tangible personal property' that specifically excludes equipment used by gas stations or fuel dealers (NAICS 457110 or 457120) as an integral part of manufacturing hydrogen fuel derived from natural gas and fossil fuel feedstocks. This prevents those businesses from claiming the tax exemption for gray hydrogen production equipment.

Several effective dates shift from January 1, 2027 to July 1, 2027, including when the expanded 'qualified person' definition applies and when the broadened special purpose buildings provision takes effect. The middle tier of building exemptions (previously running from January 1, 2018 to January 1, 2027) is extended through July 1, 2030.

The digest clarifies that the backfill requirement (transferring revenue losses from the Greenhouse Gas Reduction Fund to the General Fund) does not apply 'with respect to the exemptions allowed by the bill,' confirming the new zero-emission vehicle fueling and charging exemptions are not subject to the existing backfill mechanism.

The entire provision creating the Electric Vehicle Service Equipment Standards Advisory Board under Section 44269.3 of the Health and Safety Code was deleted. The bill no longer addresses EV charging equipment standards or safety.

The bill title and digest were updated to remove reference to transportation electrification and the Health and Safety Code, reflecting that the bill now only amends the Revenue and Taxation Code. The digest also describes the exemption as 'partial' rather than a full exemption.

The core exemption in paragraph (a)(6) was narrowed from property 'used primarily in the fueling of an electric vehicle' to property used 'exclusively in the processing, altering, or other preparation required for converting or conditioning hydrogen or electricity for the fueling of a zero-emission vehicle.' This changes the threshold from 50 percent use ('primarily') to 100 percent use ('exclusively') and limits the activity to conversion/conditioning rather than all fueling activities.

New paragraph (a)(7) exempts qualified tangible personal property purchased by a contractor for use in performing a construction contract for a qualified person, where the property will be an integral part of the hydrogen or electricity conversion/conditioning activity described in paragraph (6).

A new clause (iii) expands the definition of 'qualified person' effective January 1, 2027 to include businesses in NAICS code 447110 (in addition to codes already listed in clause (ii)), broadening which businesses can claim the exemption.

A new category of 'qualified tangible personal property' was added: hydrogen fueling and charging station equipment and component parts used as an integral part of the exempt activity, explicitly listing onsite storage tanks, cryogenic pumps, vaporizers, compressors, chillers, piping, valves, dispensers, meters, controls, safety systems, and associated operating structures.

A new subclause (iv)(III) adds special purpose buildings and foundations used as an integral part of the processing, conditioning, storage, or preparation of hydrogen for sale at retail for use as a motor vehicle fuel at a hydrogen refueling station, effective January 1, 2027 through June 30, 2030.

Added a new Section 1 amending Revenue and Taxation Code Section 6377.1 to exempt qualified tangible personal property purchased for use primarily in fueling an electric vehicle from state sales and use tax. This is the major substantive addition to the bill.

The bill's title and legislative counsel digest were expanded to reflect the addition of the Revenue and Taxation Code amendment alongside the original Health and Safety Code advisory board provision. The original advisory board content is retained but repositioned after the new tax provisions.

Added a mechanism requiring transfers from the Greenhouse Gas Reduction Fund to the General Fund to offset the revenue loss from the new tax exemption, with annual reporting by the Department of Tax and Fee Administration each May 1.

Added Section 2 containing legislative findings on tax expenditure goals: encouraging investment in zero emission fuel cell vehicle fueling infrastructure, supporting hydrogen fueling station targets from Executive Orders B-48-18, N-27-20, and N-27-25, supporting California's hydrogen economy, and encouraging technology neutrality between ZEV platforms.

Added performance indicators for the Legislature to evaluate: number of hydrogen fueling stations built, number of fuel cell electric vehicles sold annually, and total kilograms of hydrogen fuel dispensed annually. The State Air Resources Board must review effectiveness in its annual Hydrogen Assessment.

The bill now takes effect immediately as a tax levy (Section 3) rather than on the standard July 1 date. The tax exemption section is repealed on January 1, 2031.

Added a $200 million per calendar year cap on exempt purchases per qualified person (or combined report group). Also added a clawback provision: if property is removed from California or converted to non-exempt use within one year of purchase, the purchaser becomes liable for sales tax plus interest.