Sales and use taxes: exemption: reshoring jobs.

Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. Existing law provides various exemptions from the taxes imposed by those laws, including an exemption until July 1, 2022, or as provided, of the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased by a qualified person for use primarily in manufacturing, processing, refining, fabricating, or recycling of property, as specified; qualified tangible personal property purchased for use by a contractor for specified purposes, as provided; and qualified tangible personal property purchased for use by a qualified person to be used primarily in research and development, as provided. Existing law provides that the exemption does not apply to any tangible personal property purchased during any calendar year that exceeds $200,000,000 of purchases of qualified tangible personal property. This bill would increase that $200,000,000 threshold to $500,000,000 for any calendar year on and after January 1, 2016, provided that $300,000,000 is for purchases of qualified tangible personal property that is used primarily for the purpose of reshoring or insourcing, defined to mean the relocation of a whole process, a piece of a process, a function, or a discrete piece of work from currently outside the boundaries of the United States to inside the boundaries of the state, either within or outside the boundaries of a company. This bill would require the city or county where the tangible personal property will be placed in service to issue a written certification that the relocation meets the definition of reshoring or insourcing, which the purchaser shall be required to furnish to the retailer for purposes of the exemption. By imposing a new duty on local governments, this bill would impose a state-mandated local program. This bill would also extend the exemption until July 1, 2024, except as otherwise provided by existing law. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. This bill would take effect immediately as a tax levy.