CA SB1053

Exempts from state sales and use taxes, effective January 1, 2011, tangible personal property purchased by qualified manufacturers for use in manufacturing, processing, refining, fabricating, or recycling processes, or for research and development activities.

Defines "qualified person" as businesses in specified North American Industry Classification System (NAICS) codes 3111-3399 and 5112, and their affiliated entities in unitary groups.

Exemption does not apply to property used primarily in administration, general management, or marketing, and excludes consumables with useful life under one year and finished product storage equipment.

Exemption does not apply to local sales and use taxes imposed by counties, cities, or districts, or to state taxes levied for locally provided services under specific code sections.

Purchasers must provide retailers with completed exemption certificates, and if exempt property is removed from California or converted to non-exempt use within one year, the purchaser becomes liable for sales tax on the original purchase price.