Plain English Breakdown
The exact definition of a 'qualified backup electricity generator' for the May sales tax break is referenced as defined in the bill but not detailed in this summary text.
AB-921: Generator Air Pollution Rules and Tax Changes
This law temporarily exempts backup generators from air pollution rules during power-loss emergencies and provides income tax credits or sales tax breaks for buying certain backup generators.
What This Bill Does
- Exempts the sale and purchase of portable or emergency backup generators from state air pollution regulations when a Governor-proclaimed state of emergency causes loss of electrical service to any part of the state.
- Allows natural persons (individuals) and small businesses to claim an income tax credit for buying backup generators costing up to $7,000 for use in residences or commercial property during taxable years from 2026 through 2030.
- Limits the total income tax credit allowed to $3,500 per taxable year.
- Provides a state sales and use tax exemption on qualified backup electricity generators purchased only during the month of May between January 1, 2027, and December 31, 2031.
- Restricts the sales tax exemption to generators costing $7,000 or less that are bought for noncommercial purposes.
- Includes specific goals, performance indicators, and data collection details required by law for new tax expenditures.
Who It Names or Affects
- Individuals (natural persons) who buy backup generators for their homes.
- Small businesses purchasing backup generators for commercial property use.
- Retailers selling qualified backup electricity generators during the month of May in eligible years or during declared emergencies involving power loss.
- The State Air Resources Board, which administers air pollution regulations.
Terms To Know
- State of Emergency
- A formal declaration by the Governor for conditions like fire, flood, or severe energy shortage that causes loss of electrical service to any part of the state.
- Income Tax Credit
- An amount subtracted directly from the income taxes a person or business owes to the state.
- Sales and Use Tax Exemption
- A rule that allows buyers to avoid paying certain state sales taxes on specific items during set times, though local taxes may still apply.
Limits and Unknowns
- The income tax credit applies only if the generator costs $7,000 or less and is capped at a total of $3,500 per year.
- The state sales tax exemption does not remove local city, county, or district taxes on these generators.
- The state sales tax exemption also does not apply to certain state tax rates dedicated for local government funding.
- The air pollution rule exception applies only while a Governor-proclaimed emergency related to power loss is active.