Manufacturing Items in California

Effective July 1, 2014 until July 1, 2022, an exemption will apply to certain purchases of items used in manufacturing operations.  The items purchased during this timeframe must fit into one of the following categories:

  • Qualified tangible personal property purchased by a qualified person to be used primarily in any stage of the manufacturing, processing, refining, fabricating, or recycling of tangible personal property;
  • Qualified tangible personal property purchased for use by a qualified person to be used primarily in research and development;
  • Qualified tangible personal property purchased for use by a qualified person to be used primarily to maintain, repair, measure, or test any qualified tangible personal property described above;
  • Qualified tangible personal property purchased for use by a contractor purchasing that property for use in the performance of a construction contract for the qualified person, that will use that property as an integral part of the manufacturing, processing, refining, fabricating, or recycling process, or as a research or storage facility for use in connection with those processes.

California defines “primarily” as more than 50% of the tangible personal property’s useful time.

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