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Property Tax Rule 133, Business Inventory Exemption

The amendments to the business inventory exemption provided for in Property Tax Rule 133 resulted from a request to BOE’s Legal Department for an opinion on space transportation equipment. BOE’s Legal Department expressed in the opinion dated January 8, 2014, that the equipment qualified for the business inventory exemption, however, BOE’s legal team felt that the Rule should be amended to specifically address space flight property. 

The BOE Legal Department held several interested parties meetings to discuss the proposed changes to the rule.  These amendments were recommended to the Board at its February 2014 meeting. The Board unanimously approved staff’s recommendation to begin the rulemaking process to revise Rule 133 on February 25, 2014. 

In addition, AB 777 (Muratsuchi), a bill that also exempts space flight property from tax, was passed by the Legislature and enacted by the Governor on April 29, 2014.