Personal Income Tax Law and Corporation Tax Law: deductions: accelerated depreciation for new manufacturing operations.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Revenue and Taxation
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill provides accelerated depreciation deductions for new manufacturing operations in California. Beginning in 2027, qualified taxpayers – those engaged in specific industries and placing at least $1 million in qualified property in service – can deduct up to 50% or 100% of the adjusted basis of eligible property, depending on whether it’s located in a high-need area. To qualify, taxpayers must certify that the property will be used primarily in the state for at least three years, and the Franchise Tax Board can impose penalties for false certification.
Key provisions
- Provides a 50% or 100% accelerated depreciation deduction for qualified property placed in service by qualified taxpayers.
- Qualified property must have an adjusted basis of at least $1,000,000.
- Eligible taxpayers must be engaged in specific North American Industry Classification System (NAICS) codes.
- Accelerated depreciation is available for property placed in service in ‘high-need areas’ (census tracts, cities, or counties with high unemployment or poverty rates).
- Taxpayers must certify under penalty of perjury that the property will be used primarily in the state for at least three years.
- The Franchise Tax Board can recapture benefits if property is used outside of California or converted to a non-qualifying use.
- The law is set to expire on January 1, 2032.
Who is affected
- Businesses engaged in manufacturing
Bill text
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Sponsors
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1 on record
Primary sponsor
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