Sales and Use Tax Exemption for Electrical Power Generation and Storage Equipment

Summary

Beginning on January 1, 2018, certain electric power generators and distributors, may qualify for a partial exemption from sales and use tax on the purchase or lease of qualified machinery and equipment primarily used in manufacturing, research and development, and electric power generation or production, storage or distribution. California Assembly Bill 398 Extended the sunset date of RTC section 6377.1 from July 1, 2022, to July 1, 2030. These exemptions may apply to any participating party or construction contractor for use in the participating party for the eligible projects defined below. Find more information on what property and businesses may qualify here.

Eligible projects include:

• Alternative energy sources
• Advanced transportation technologies
• Advanced manufacturing
• Recycled Feedstock

Exemptions do not apply to:

• Tangible property purchased during any year exceeding $200,000,000.
• The sale or storage, use, or other consumption of property that, within one year from the date of purchase, is removed from California.

Persons who wish to obtain this exclusion must apply to the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA).