Digital News Report – Legislation by Senate Republican Leader-elect Bob Dutton (R-Rancho Cucamonga) that would help private sector job creation through tax incentives was killed today by Democrats in the Senate Revenue and Taxation Committee.
The bill was killed by Democrats and subsequently moved to the Committee’s “suspense file” where it will likely remain. Senator Dutton objected to the bill being sent to the “suspense file”.
Senate Bill 6X 8 would have exempted certain machinery and equipment purchases used in manufacturing and research and development from the state portion of the sales tax.
Senator Dutton pointed out during his testimony that California is only one of three states in the country that taxes the purchase of this type of equipment without a tax exemption.
According to the Milken Institute, a reduction in the sales tax for the purchase of manufacturing equipment would create 500,000 jobs over the next ten years.
“We have to address the problems that make California the most expensive place in the nation to do business, and this bill is an example of that,” Senator Dutton said. “If majority Democrats are truly serious about helping the private sector, we need to lift the burdens that are driving these good paying manufacturing jobs out of our state.”
Senator Dutton pointed out that these types of tax credits are something they have supported in the past.
Just last year several Democrats frantically scrambled to put together a package of tax incentives, including SB 483 by Democrat Senators Rod Wright and Ellen Corbett, offering a variety of financial incentives in an attempt to save the NUMMI auto manufacturing facility in Fremont.
Unfortunately the effort was too little, too late, and the plant closed, which not only cost the community of Fremont 4,700 jobs, but also 20,000 other jobs throughout the state that supported the Northern California auto manufacturing plant.
Furthermore, just last month the Legislature approved a measure (SB 71) by Senator Alex Padilla, providing a targeted sales tax exemption for manufacturers of alternative energy. Unfortunately, that measure excludes “non-green” manufacturers that continue to provide and create the vast majority of California’s manufacturing jobs.
“I’m encouraged by some of my jobs legislation (SB 1155, 942 and 1160) is moving forward in a bi-partisan manner,” Senator Dutton said. “Today is a setback in our effort to help California’s private businesses compete nationally and globally. But despite the setback I will continue to fight for private sector jobs because ensuring that these jobs have a chance to grow and prosper is the only way that California’s economy is going to turn around.”