AB-2377 • 2026

Personal Income Tax Law and Corporation Tax Law: deductions: accelerated depreciation for new manufacturing operations.

Crime Education Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Soria
Last action: 2026-04-13
Official status: In committee: Set, first hearing. Referred to REV. & TAX. suspense file.
Effective date: Not listed

Plain English Breakdown

The official source material does not provide specific details on how the effectiveness of the tax break will be measured.

Accelerated Depreciation Deduction for New Manufacturing

AB-2377 allows new manufacturing operations in California to claim an accelerated depreciation deduction on certain property, with specific requirements and limitations.

What This Bill Does

Allows businesses that start new manufacturing operations after January 1, 2027 and before January 1, 2032 to deduct a larger portion of the cost of their equipment from their taxes.
Requires companies to spend at least $1 million on property used for manufacturing in California to qualify for this deduction.
Needs businesses to promise under penalty that they will use the property mainly in California for three years after getting the tax break.

Who It Names or Affects

Businesses starting new manufacturing operations in California from January 1, 2027 to December 31, 2031

Terms To Know

Accelerated Depreciation Deduction: A tax break allowing businesses to deduct a larger portion of the cost of their equipment from their taxes over a shorter period.
Qualified Property: Property that meets specific criteria and can be used for manufacturing operations in California.

Limits and Unknowns

The bill does not specify how the tax break will affect local agencies or school districts beyond stating no reimbursement is required.
It's unclear what happens if a business doesn't follow through with using the property mainly in California as promised.

Bill History

2026-04-13 California Legislative Information
In committee: Set, first hearing. Referred to REV. & TAX. suspense file.
2026-04-06 California Legislative Information
Re-referred to Com. on REV. & TAX.
2026-03-26 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.
2026-03-23 California Legislative Information
Re-referred to Com. on REV. & TAX.
2026-03-19 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.
2026-03-19 California Legislative Information
Referred to Com. on REV. & TAX.
2026-02-20 California Legislative Information
From printer. May be heard in committee March 22.
2026-02-19 California Legislative Information
Read first time. To print.

Official Summary Text

AB 2377, as amended, Soria.
Personal Income Tax Law and Corporation Tax Law: deductions: accelerated depreciation for new manufacturing operations.
The Personal Income Tax Law and the Corporation Tax Law, in conformity or modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by those laws, including a deduction for depreciation of certain property put into the service of a trade or business.
This bill, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, would provide for an accelerated depreciation deduction of 50% or 100%, as applicable, of the adjusted basis, as specified, of qualified property, as defined, put into service by a qualified taxpayer, as defined, during the taxable year. The bill would require a qualified taxpayer to place qualified property with an adjusted basis of at least $1,000,000 into service in the state during the taxable
year in order to be eligible for the accelerated depreciation deduction. The bill would require the qualified taxpayer to certify under penalty of perjury that qualified property put into service during the taxable year will be primarily used in the state for at least 3 years. By expanding the crime of perjury, this bill would impose a state-mandated local program.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would also include additional information required for any bill authorizing a new tax expenditure.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would take effect immediately as a tax levy.

Current Bill Text

Read the full stored bill text

Download Bill PDF