The Latest
- Required Information
- Approval Process for Financial Assistance (and Potential Sales and Use Tax Exemption) for the Purchase of ZEV Manufacturing Equipment
- Treasurer Lockyer Announces Financial Incentive to Encourage Zero-Emission Vehicle Manufacturing in California
- Executive Director McFarland Discusses CAEATFA, Zero-Emission Vehicle Initiative and Renewable Energy Bond Legislation
California Alternative Energy and Advanced Transportation Financing Authority
Current Incentives
The following are the incentive programs that CAEATFA’s Board has currently authorized.
Lease/Purchase Agreements That May Result In Certain Zero Emission Vehicle (Zev) Manufacturing Project Transactions Being Exempt From Sales And Use Taxes
Under CAEATFA's authorizing statute, the authority’s purpose is to provide industry in California with alternative methods of financing alternative energy and advanced transportation technologies. The statute defines advanced transportation as: "emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the state's commitment to energy conservation, pollution reduction, and transportation efficiency."
The CAEATFA Board has directed authority staff to explore proposals that may provide sales and use tax exemptions for the purchase of ZEV manufacturing equipment. The goal of this new ZEV program is to create a strong new ZEV industry within California that reduces green house gas emissions and creates new long-term high value-added jobs.
Typically, the exemption can be created through a sales-lease-back approach where: CAEATFA acquires specified equipment (tangible personal property, not real property) from a participating party on behalf of company X. CAEATFA finances this purchase through a bond or loan. Company X then leases the equipment from CAEATFA, with the lease payments paying for the bond or loan. As envisioned, the lease would stay in existence only from the time of the equipment purchase by CAEATFA until the equipment is placed in use and purchased by the participating party. Where the Board of Equalization finds the conditions of the Revenue and Taxation Code are met, neither the acquisition of the equipment by CAEATFA nor the transfer of the equipment to the participating party will be subject to sales and use taxes.