SB 587CALIFORNIASession 20252026

California SB 587 creates new tax credit for manufacturing equipment sales and use taxes

Original title: Personal income taxes: credit: manufacturing: sales and use taxes.

August 13, 2026

Taxes Manufacturing Corporate Tax Personal Income Tax State Budget Personalincometaxes credit salesandusetaxes

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The Frame

What this does

This bill provides a new financial incentive for manufacturers by offsetting local tax costs on equipment purchases, though the credit's availability depends on annual legislative budget appropriations.

Who is mentioned in the record

Potentially affected actors named in the source documents. Mention is not a position.

Manufacturers

They may claim a tax credit for local sales and use taxes paid on qualified equipment purchases.

California Department of Tax and Fee Administration

The agency is authorized to share taxpayer information with the Franchise Tax Board.

Franchise Tax Board

The board is responsible for administering the new tax credit.

What changed

Last recorded activity August 13, 2026.

What's next

Introduced.

Summary

SB 587 allows taxpayers to claim a credit against personal income and corporation taxes equal to the amount of local es paid on manufacturing equipment that would otherwise be exempt from state-level taxes. This credit applies to taxable years beginning on or after January 1, 2026, and ending before January 1, 2031, provided the Legislature appropriates funding for its administration.

Key Facts

You don't have to trust us. Each fact below is taken straight from the official document - click any one to see the exact passage, highlighted in the original.

Why It Matters

Frequently Asked Questions

Who is eligible for this tax credit?

Taxpayers who pay sales or use tax on qualified tangible personal property used for manufacturing, recycling, or research and development that would otherwise be exempt from state-level taxes.

Is this credit guaranteed for the next five years?

No, the credit is only allowed for taxable years in which the Legislature appropriates specific funding in the Budget Act for its administration.

What happens if I misuse the tax information shared between agencies?

The bill applies existing restrictions on information sharing, and violations are classified as a crime.

News Coverage

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Discoveries

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift90% confidence

Conditional Tax Credit

The credit is not automatic; it is contingent upon annual legislative appropriation, creating a mechanism for the Legislature to control the fiscal impact year-to-year.

California Legislature Department of Finance

Connected Entities

organizationCalifornia Department of Tax and Fee Administration“Authorized to share information with the Franchise Tax Board to administer the c”Map →

otherLocal Revenue Fund 2011“Existing fund for local tax revenue.”Map →

organizationDepartment of Finance“Required to provide annual revenue impact estimates to budget committees.”Map →

organizationFranchise Tax Board“Responsible for administering the new tax credit.”Map →

Sources

Open source document

openstates.org

Analysis Score

0–100

Significance65
How much this matters to a regular citizen
Controversy20
Intensity of disagreement among stakeholders
Entertainment5
Compellingness for a non-policy-wonk reader
Buzz15
Current news / social attention level

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