A 4 percent sales tax credit on the sale of manufacturing and research and development equipment has gone into effect in California. The credit will last eight years.
Some small business owners say any tax relief provided by the state would be a help for people who want to retool their businesses.
“If they want to make their operation more efficient, I could see that being a very pleasant perk that people would be interested in,” says Louise Revet, owner of Oakland-based patio umbrella manufacturer Accent Umbrella.
Supporters of the tax break say small businesses and start-ups would not be the only beneficiaries of the credit.
“It also allows the same competitive opportunity for all sizes of business in California,” says Kirk Everett with the Silicon Valley Leadership Group.
A 6 percent sales tax credit on manufacturing equipment expired more than a decade ago.
Backers of the new credit say California had been one of few states that didn’t offer some type of tax incentive on business equipment sales.