Gov. Brown acknowledges the need for a competitive manufacturing environment, but proposal falls short
May 16, 2011 Sacramento, CA -- California Manufacturers & Technology Association president, Jack Stewart, made the following statement today regarding Governor Jerry Brown's revised 2011-2012 state budget:
In his revision, Gov. Brown acknowledges that California manufacturers suffer 'double-taxation' and a disincentive to locate in California by paying sales and use tax on machinery and equipment used in the manufacturing process. He proposes to make California more tax friendly for start-up firms by exempting the 5-cent, state portion of the sales and use tax on the purchase of manufacturing equipment for the next four years.
Unfortunately, he proposes only a 1-cent sales and use tax reduction on new investments by existing California manufacturers, thus maintaining anti-competitive tax policy and applying it to all firms once they become established in the state. California is one of only three states that apply sales and use tax to capitol investments for manufacturers.
These proposals acknowledge the value of a competitive tax environment for the engine of our economy -- manufacturing, We are disappointed that the recommendation is insufficient to encourage existing businesses to compete and grow in California. Gov. Brown understands the problem, now we urge him to develop a meaningful plan for spurring manufacturing growth in the state."