Why California’s Tax Policies Are Hindering R&D Job Creation

As one of just a few states that impose a sales tax on manufacturing and R&D equipment, California imposes higher equipment costs on its manufacturers, which may drive them out of state, Annette Nellen, a professor at San Jose State University, writes in this week’s issue of the Weekly State Tax Report. Professor Nellen and other prominent state tax experts will analyze California’s recent passage of tax-related ballot initiatives and tax issues ripe for reform in a Bloomberg BNA Webinar from 12:30 to 2 p.m. ET on March 26.

Notwithstanding its long history of companies engaged in in-state manufacturing and R&D, California has steadily lost manufacturing jobs as other states and countries have worked to make themselves more attractive to these businesses. The U.S. Bureau of Labor Statistics reports California lost approximately 425,000 manufacturing jobs from 2002 to 2012, and is having less success, relative to some other states including Texas and Ohio, in capturing the uptick in these jobs that started in 2010, she reports.

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