California: Partial Tax Exemptions to Decrease, January 2016
- Sales Tax Rate Changes
- Sep 9, 2015 | Gail Cole
California’s 2004 Proposition 57 enabled the state to purchase bonds to reduce the state’s deficit. Under the provisions of the proposition, certain sales and purchases qualify for a partial exemption from sales and use tax.
Currently, California provides partial exemptions for the following:
- Manufacturing and research and development equipment
- Teleproduction or other postproduction service equipment
- Farm equipment and machinery
- Diesel fuel used in farming activities or food processing
- Timber harvesting equipment and machinery
- Racehorse breeding stock
Since the bonds have now been paid in full, most partial tax exemptions will decrease by 0.25% in the new year. Effective January 1, 2016, the partial exemption for the following will drop from 5.5% to 5.25%:
- Rural investment
- Teleproduction
- Farm equipment/machinery
- Timber harvesting equipment
- Racehorse breeding stock
In addition, the partial exemption for diesel fuel used in farming activities or food processing will drop from 7.25% to 7%. Additional information is available in California State Board of Equalization Information Bulletin 388.
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