California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 3 - Manufacturers, Producers, Processors › Section 1525.4 - Manufacturing, Research and Development, and Electric Power Equipment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Partial
				  Exemption for Property Purchased for Use in Manufacturing, Research and
				  Development, and Electric Power Generation or Production, Storage, or
				  Distribution. Except as provided in subdivision (d), beginning July 1, 2014,
				  and before July 1, 2030, Revenue and Taxation Code (RTC) section
				  6377.1 provides a partial
				  exemption from sales and use tax for certain sales and purchases, including
				  leases, of tangible personal property as described in this regulation.
For the period beginning July 1, 2014, and ending on
					 December 31, 2016, the partial exemption applies to the taxes imposed by RTC
					 sections 6051 (except the taxes deposited
					 pursuant to section
					 6051.15), 6051.3, 6201 (except the
					 taxes deposited pursuant to section
					 6201.15), and 6201.3 and section
					 36 of article XIII of the
					 California Constitution (4.1875%). The partial exemption does not apply to the
					 taxes imposed or deposited pursuant to RTC sections
					 6051.2,
					 6051.5,
					 6051.15,
					 6201.2,
					 6201.5, or
					 6201.15, the Bradley-Burns Uniform
					 Local Sales and Use Tax Law, the Transactions and Use Tax Law, or section
					 35 of Article XIII of the
					 California Constitution.
For the period beginning January 1, 2017, and ending on
					 June 30, 2030, the partial exemption applies to the taxes imposed by RTC
					 sections 6051 (except the taxes deposited
					 pursuant to section
					 6051.15), 6051.3, 6201 (except the
					 taxes deposited pursuant to section
					 6201.15), and 6201.3 (3.9375%).
					 The partial exemption does not apply to the taxes imposed or deposited pursuant
					 to RTC sections
					 6051.2,
					 6051.5,
					 6051.15,
					 6201.2,
					 6201.5, or
					 6201.15, the Bradley-Burns Uniform
					 Local Sales and Use Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
Subject to the limitation set forth above, this partial
					 exemption from tax applies to the sale of and the storage, use, or other
					 consumption in this state, of the following items:
(1) Qualified tangible personal property
				  purchased for use by a qualified person to be used primarily in any stage of
				  the manufacturing, processing, refining, fabricating, or recycling of tangible
				  personal property, beginning at the point any raw materials are received by the
				  qualified person and introduced into the process and ending at the point at
				  which the manufacturing, processing, refining, fabricating, or recycling has
				  altered tangible personal property to its completed form, including packaging,
				  if required.
(2) Qualified tangible
				  personal property purchased for use by a qualified person to be used primarily
				  in research and development.
(3)
				  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 in subdivision (a)(1) or (2).
(4) Qualified tangible personal property
				  purchased for use by a qualified person to be used primarily in the generation
				  or production, storage, or distribution of electric power.
(5) Qualified tangible personal property
				  purchased for use by a contractor purchasing that property for use in the
				  performance of a construction contract for a qualified person, provided that
				  the qualified person will use the resulting improvement on or to real property
				  as an integral part of the manufacturing, processing, refining, fabricating, or
				  recycling process, the generation or production, storage, or distribution of
				  electric power, or as a research or storage facility for use in connection with
				  those processes.