CDTFA-230-M REV. 5 - PARTIAL EXEMPTION CERTIFICATE FOR MANUFACTURING, RESEARCH AND DEVELOPMENT, AND ELECTRIC POWER EQUIPMENT

Sep 19, 2026

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California AB 398 (Chapter 135, Stats. 2017) and AB 131 (Chapter 252, Stats. 2017) amend RTC section 6377.1, expanding and revising the definitions for qualified persons and qualified tangible personal property used for manufacturing, research and development, and electric power generation, storage, or distribution. The document provides the partial sales and use tax exemption certificate CDTFA-230-M (Rev. 5), including exemption rates by period, eligibility check categories, required seller/lessor and purchaser details, and circumstances requiring reporting and tax payment.

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INFORMATION UPDATE

Statutory changes beginning January 1, 2018

Exemption certificate forms and regulation reference

PARTIAL EXEMPTION CERTIFICATE (CDTFA-230-M REV. 5)

Exemption rates and applicability periods

Purchaser and property qualification statements

Reporting and tax payment triggers

Signature and contact information

California Department of Tax and Fee Administration INFORMATION UPDATE Assembly Bill (AB) 398 (Chapter 135, Stats. 2017) and AB 131 (Chapter 252, Stats. 2017) amended Revenue and Taxation Code (RTC) section 6377. 1, which provides for a partial sales and use tax exemption for certain manufacturing and research and development equipment. Among other changes, the amendments change, beginning January 1, 2018: • The definition of a “qualified person” to include persons primarily engaged in electric power generation or distribution of electric power as described in North American Industry Classification System (NAICS) codes 221111 to 221118, or 221122. • The definition of “qualified tangible personal property” to include special purpose buildings and foundations used as an integral part of the generation or production, or storage and distribution, of electric power. The exemption certificate forms, CDTFA-230-M, Partial Exemption Certificate for Manufacturing, Research and Development, and Electric Power Equipment, and CDTFA-230-MC, Construction Contracts—Partial Exemption Certificate for Manufacturing, Research and Development, and Electric Power Equipment, are included in Regulation 1525.4, Manufacturing, Research and Development, and Electric Power Equipment. We have revised the date on the posted exemption certificate forms to conform with the statutory changes. For more information about the amendments to RTC section 6377.1 , please refer to our online guide, Tax Guide for Manufacturing, and Research and Development, and Electric Power Equipment and Buildings Exemption. CDTFA-230-M REV. 5 (9-26) STATE OF CALIFORNIA PARTIAL EXEMPTION CERTIFICATE FOR MANUFACTURING, CALIFORNIA DEPARTMENT OF RESEARCH AND DEVELOPMENT, AND ELECTRIC POWER EQUIPMENT TAX AND FEE ADMINISTRATION Section 6377.1 This is a partial exemption from sales and use taxes at the rate of 4.1875% from July 1, 2014 to December 31, 2016, and at the rate of 3.9375% from January 1, 2017 to June 30, 2030. You are not relieved from your obligations for the remaining state tax and local and district taxes on this transaction. This partial exemption also applies for lease periods occurring on or after July 1, 2014 and before July 1, 2030, for leases of qualified tangible personal property even if the lease agreement was entered into prior to July 1, 2014. I hereby certify that the tangible personal property described below and purchased or leased from: SELLER’S/LESSOR’S NAME SELLER’S/LESSOR’S ADDRESS (street, city, state, ZIP Code) is qualified tangible personal property and will be used by me primarily (please check one): 1. For manufacturing, processing, refining, fabricating, or recycling; 2. For research and development; 3. To maintain, repair, measure, or test any property being used for (1) or (2) above; 4. For the generation or production, storage, or distribution of electric power; or 5. As a special-purpose building and/or foundation. Description of qualified tangible personal property purchased or leased1: If this is a partial exemption certificate for a specific purchase, provide the purchase order or sales invoice number and a precise description of the property being purchased. If you want this certificate to be used as a blanket certificate for future purchases, describe generally the type of property you will be purchasing and ask your vendor to keep this certificate on file. I, as the undersigned purchaser, hereby certify I am primarily engaged in a qualifying line or qualifying lines of business, including manufacturing, as described in Codes 3111 to 3399 of the North American Industry Classification System (NAICS)2, research and development, as described in Codes 541711 and 541712 of the NAICS, electric power generation, as described in Codes 221111 to 221118 of the NAICS, and electric power distribution, as described in Code 221122 of the NAICS. I understand that by law, I am required to report and pay the st

FAQs

What partial sales and use tax exemption rates are stated for CDTFA-230-M (Rev. 5)?

The certificate states a partial exemption rate of 4.1875% from July 1, 2014 to December 31, 2016, and 3.9375% from January 1, 2017 to June 30, 2030.

Who can qualify under the amended definitions for the exemption?

A “qualified person” includes entities primarily engaged in electric power generation or distribution under specified NAICS codes, and “qualified tangible personal property” includes special purpose buildings and foundations integral to electric power generation/production, or storage and distribution.

When must a purchaser report and pay state tax despite the partial exemption?

By law, reporting and paying state tax is required if the purchase exceeds the $200 million limitation, or within one year if the property is removed from California, converted to non-qualifying use, or used in a manner not qualifying for the partial exemption.

Sep 19, 2026

Upload by Kyle