By PE Politics
March 23, 2011 1:36 PM
A Senate committee signed off Wednesday on an Inland Southern California lawmaker’s bill to exempt manufacturing and research equipment from the state sales tax. A similar measure never made it out of committee last year.
Senate Minority Leader Bob Dutton, R-Rancho Cucamonga, the bill’s author, said California is one of only three states that collect sales tax on the equipment used for manufacturing and research purposes.
“We’re losing to Mississippi, to South Carolina, to Texas. We have to do something. To continue to do nothing is to do a disservice to the people we’re trying to help,” said Dutton, R-Rancho Cucamonga.
The Senate Governance and Finance Committee passed the bill 6-3.
The proposed exemption would cost the state general fund an estimated $600 million to $1 billion annually, according to an analysis of Dutton’s unsuccessful 2010 bill.
California currently offers more than $40 billion in various tax breaks. Critics said the state shouldn’t add to the total while lawmakers cut billions in spending to help close a $26 billion shortfall.
Committee Chairwoman Lois Wolk, D-Davis, insisted that Dutton add a sunset date and performance measures to the bill.
“As a state, we ought to consider this,” said Wolk, who voted against last year’s measure.
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