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California’s Border Wall And Participation With State Tax Credits



The Federal Government’s proposed border wall with Mexico has been getting a lot of attention lately, particularly since the president recently visited the Golden State. One California legislator has an interesting take on the ongoing disagreement between California and the White House. Assemblyman Phil Ting, of CA, recently announced his bill, A.B. 2355, as a way to incentivize companies not to participate in the building of the wall.

The Logistics

As recently reported by Bloomberg BNA, companies that participate in the building of the Federal government’s proposed wall with Mexico, on the California border, would not be able to participate in several state tax credits.

If passed, this bill would prohibit companies that contract or subcontract to build the wall from receiving various tax breaks, including:

  •  a sales and use tax exemption on purchases of manufacturing and research and development equipment;
  •   a sales and use tax exclusion for equipment purchased for projects to promote use of alternative energy administered by the California Alternative Energy and Advanced Transportation Financing Authority;
  •   an income tax credit for employers that hire employees in certain economically disadvantaged areas;
  •   the California Competes credits for companies that commit to locating or expanding in California, administered by the Governor’s Office of Business and Economic Development; and
  •   an income tax credit for qualified research expenses

Most Californians oppose the border wall. Mexico is California’s largest trading partner, so building the wall is likely to hinder relations with Mexico.

Why Do We Care?

Miles Consulting Group likes to stay on top of CA Legislation- even if it seems a little reaching. (We think this bill is unlikely to pass given that it’s probably discriminatory on its face and would be challenged if ever enacted.)

Although our primary goal is to deliver the latest state tax news, we also like to keep our readers informed of current legislation in our home state of CA.

Stay tuned for other types of legislation making multi-state headlines!

Have a question? Contact Monika Miles.

Your comments are always welcome!

Monika Miles

Monika founded Miles Consulting Group which focuses on multi-state tax consulting, helping clients navigate state tax issues such as sales tax and income tax in interstate commerce, including e-commerce.

Prior to forming the firm, Monika worked for 12 years combined in Big 4 Public Accounting and private industry. Monika has provided such services as federal and state income/franchise tax compliance and consulting, sales/use tax consulting, audit support, and credits and incentives reviews. She has served clients in a variety of industries including manufacturing, technology, telecommunications, construction, utility, retail and financial institutions.

Monika graduated from the University of Texas at El Paso (UTEP) with a BBA in Accounting/Finance and has a Masters in Taxation from San Jose State University.