Calif. considers greentech tax break

California Gov. Arnold Schwarzenegger

Gov. Arnold Schwarzenegger is pushing a proposal to exempt greentech manufacturing equipment from sales tax as part of a $500 million multi-part jobs package targeting the Golden State’s 12.2 percent unemployment rate.

The governor’s office says the tax exemption wouldn’t cost the state money, but instead would boost revenue by encouraging cleantech companies to locate manufacturing operations in California.

“The cost of doing business in California tends to be high,” said John Boesel, president and CEO of cleaner transportation advocacy organization Calstart, speaking at a press conference with Schwarzenegger in January. More than 40 other states have sales tax exemptions for manufacturing equipment, he added.

The governor and Boesel spoke from the Mountain View headquarters of biobutanol maker Cobalt Biofuels. Schwarzenegger pointed to Cobalt—which plans to build a 1,300-employee commercial production facility in the next two years—as a company that would benefit from the tax exemption, making it more likely to locate its facility in California.

The proposed legislative package, which also includes hiring incentives and training reimbursements, could create or retain up to 100,000 jobs, according to the governor’s office.