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California Governor Eliminates Enterprise Tax Zones

California's governor signed off on a new job creation strategy for the state today.

— A swipe of the governor's pen wiped away California's enterprise tax zones and created a new job strategy focused on sales tax exemptions for companies that buy manufacturing as well as research and development equipment.

Photo credit: Officer Phil

California Governor Jerry Brown

Jerry Brown took the action after touring the local offices of biotech company Takeda California. He said the new program will create good manufacturing jobs and is open to any company that meets program requirements.

"This is taking a program that was conceived with good intentions, that evolved into a counterproductive operation of state government and reforming it to incentivize businesses," said Brown.

The measure also includes a tax credit for companies that retain middle-class jobs in California. Republican Assemblyman Brian Maienschein said there's a lot of good in the new strategy.

"For them to buy manufacturing equipment, for them to expand jobs and their facilities, I think that's going to be very beneficial for our local economy," said Maienschein.

The new program was a compromise. Brown initially wanted to eliminate the $750 million enterprise tax zone program but business groups complained and hammered out the compromise.

Brown said this program makes California more competitive with the business climate in Texas, whose governor, Rick Perry, has actively lobbied local companies to make the move to the Lone Star State.

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