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Sales & Use Tax Tips for October 2010
CALIFORNIA ENACTS SALES AND USE TAX EXCLUSION FOR CERTAIN GREEN INDUSTRIES
Does your company make alternative energy source products that are beneficial to the environment?
If so and you are located in California you may be able to obtain an exclusion from sales and use tax when making purchases of certain equipment. SB 71 signed into law earlier this year, allows certain manufacturers of green technology to purchase manufacturing equipment without the payment of California Sales and Use tax. However, in order to obtain the exemption, the manufacturer must apply and pay a fee to the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) and meet certain criteria.
The legislation expanded the exemption to include manufacturing equipment used for the "design, manufacture, production, or assembly" of advanced energy source products, components, or systems. Some examples included in the exclusion are pieces of equipment substantially used to design, manufacture, produce, or assemble products which are used to produce energy like solar, biomass, wind, geothermal, and other sources of energy which reduce the use of fossil and nuclear fuels.
In order to be approved, a manufacturer's efforts to produce these types of products must provide a sufficient foreseeable net benefit to the State of California. For example, the manufacturing equipment must be purchased for facilities in California and the benefits to the state must equal or exceed benefits to the applicant. Further, the project must create jobs in the state, reduce green house gases, air, or water pollution beyond what is required by Federal law. However, these are only some of the criteria that will need to be met.
The State has begun accepting applications. The deadline for the December 15th board meeting is November 1st.
If you are a manufacturer of energy efficient products and need assistance to determine whether your company qualifies, Olivier & Associates, LLC can assist you to weed through the requirements and/or assist your company in completing the necessary documents to apply for the exemption.
To learn more about the energy source product exemption or require assistance please Contact us today. Or call 1-888-466-2829 to speak with an Olivier &
Associates Sales and Use Tax professional for a no-obligation consultation about your Sales & Use Tax issues.
Please click here for more Sales Tax Tips or visit our website at www.oatax.com for information. For additional insight on common sales tax concerns, please see the Did You Know? section of our website.
* This tip is intended to provide general information only and is not to be considered as a substitute for professional advice.
