Under current law, sales tax on capital equipment purchases must be paid upfront and then refunded.  This bill adds language allowing a capital equipment sales tax exemption at the time of purchase for small businesses. 

As defined under current law, a “small business” is a for-profit entity that:

• is not an affiliate or subsidiary of a business dominant in its field of operation;
• has 20 or fewer full-time employees; and
• has not had more than the equivalent of $1,000,000 in annual gross revenues or, if the business is a technical or professional service, has not had more than the equivalent of $2,500,000 in annual gross revenues in the preceding fiscal year.

This bill is effective for sales and purchases made after June 30, 2012.

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