Sacramento, Calif. – The California Manufacturers & Technology Association (CMTA), joined by more than 25 statewide business and industry organizations, sent a letter to the Senate and Assembly Budget Committees urging inclusion of a $210 million Manufacturing Investment Credit (MIC) in the 2026-27 State Budget. The broad coalition supporting the investment credit reflects manufacturing’s extensive reach across numerous industries. Click here to read the letter, here to read a factsheet on the MIC, and here for an FAQ.
The proposal would re-establish the MIC, a targeted tax credit that allows manufacturers to recover local sales and use taxes paid on qualifying new equipment purchased and installed in California.
“Manufacturing plays a uniquely powerful role in California’s economy, yet we’re falling behind the majority of other states that already offer investment incentives,” said Lance Hastings, President & CEO of CMTA. “The Manufacturing Investment Credit will help keep these jobs and investments here in California, and maintain the state’s status as number one in the industry.”
California is home to the nation’s largest manufacturing workforce, yet it remains one of the few states without a comparable investment incentive. Meanwhile, 38 other states provide a full tax credit to support manufacturers, leaving California at a competitive disadvantage for attracting and retaining businesses.
The coalition’s letter highlights how the benefits of the MIC extend well beyond manufacturing companies. Equipment upgrades and facility investments support construction workers, engineers, suppliers, logistics providers, and small businesses throughout local communities. Economic analyses indicate the MIC could support 163,000 new jobs and generate up to $4.5 billion in statewide economic activity.
“The broad coalition supporting the Manufacturing Investment Credit shows the industry’s positive ripple effect across the state,” Hastings added. “By making this strategic budget investment in California manufacturers, we are supporting middle-class jobs, stronger supply chains, and ensuring California remains a global leader in innovation and production.”
The MIC is also reflected in SB 587 (Grayson), which passed the Senate and is currently pending in the Assembly Appropriations Committee. SB 587 is the Legislature’s third attempt to re-establish the MIC, following AB 1951 (Grayson, 2022) and AB 52 (Grayson, 2024), both of which were vetoed by the governor with direction that the investment credit be included in the state budget.
Budget adoption would accelerate implementation and provide immediate clarity for manufacturers making capital investment decisions.
The letter urging for the MIC is signed by:
- Aerospace Defense Alliance of California
- American Pistachio Growers
- BizFed
- BOMA
- California Business Properties Association
- California Business Roundtable
- California Chamber of Commerce
- California Construction and Industrial Materials Association
- California Cotton Ginners and Growers Association
- California Fresh Fruit Association
- California Hispanic Chamber of Commerce
- California Manufacturers & Technology Association
- Can Manufacturers Institute
- CSI Consolidation Holdings
- Downtown San Diego Partnership
- Glass Packaging Institute
- Industrial Environmental Association of San Diego
- NAIOP
- NAIOP SoCal
- Orange County Business Council
- Silicon Valley Leadership Group
- Specialty Equipment Market Association
- Tri Tool Technologies
- Western Tree Nut Association Western Wood Preservers Institute
- Wine Institute
CMTA and its coalition partners stand ready to work with lawmakers to advance this critical investment in California’s economic future.
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About CMTA
The California Manufacturers & Technology Association (CMTA) has advocated for pro-growth laws and regulations before the California legislature and administrative agencies since 1918. The total output from manufacturing in California is $382 billion per year, roughly 10 percent of the total economic output of the state. Manufacturers employ 1.2 million Californians paying wages more than $2,500 higher than other non-farm employers in the state.