CA Board of Equalization (BOE) has a partial sales tax exemption for certain manufacturers, and research & developers. If you qualify let’s get that money!
Beginning on July 1, 2014, manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases. To be eligible for this partial exemption, you must meet all three of these conditions:
1. Be engaged in certain types of business, also known as a “qualified person.”
2. Purchase “qualified property .”
3. Use that qualified property for the uses allowed by law.
When you make a qualifying purchase or lease, you must provide the seller with a partial exemption certificate to obtain the reduced tax rate. Qualifying manufacturers or research and developers may use form BOE- 230-M, Partial Exemption Certificate for Manufacturing Equipment, Research and Development Equipment.
If you pay the full amount of sales tax at the time of purchase, and later discover that you have met all of the qualifications, you may issue a partial exemption certificate along with supporting documentation to your retailer. The retailer may then file a claim for refund for the overpaid portion of sales and use tax on your behalf. If the transaction was subject to use tax, the purchaser may file a claim directly with the BOE.
The state portion only for the partial exemption is currently at 3.9375 percent.