Sales and use taxes: exemptions: blood screening testing.
The bill is expected to have significant implications for public health and healthcare infrastructure in California. By providing a tax incentive, AB 2989 encourages the establishment of blood testing facilities within the state, which could lead to improved responsiveness during public health emergencies and a more robust blood donation system. Furthermore, the exemption from sales and use tax extends to important medical supplies and reagents, which are critical in safeguarding the quality and safety of blood products — a vital resource for numerous medical procedures.
Assembly Bill No. 2989, introduced by Assembly Members Arambula and Patterson, focuses on the exemption of sales and use tax on certain materials related to blood screening tests performed by licensed blood banks. Specifically, the bill stipulates that between January 1, 2021, and December 31, 2026, the gross receipts from the sale, storage, use, or other consumption of reagents, chemicals, and laboratory supplies used for blood screening will be exempt from taxes. This legislative action aims to encourage blood banks to perform necessary testing in-house, ensuring a more efficient and rapid safety evaluation of blood donations.
The overall sentiment regarding AB 2989 has been positive among proponents who view it as a necessary step for advancing public health initiatives and supporting the operational capabilities of blood banks. The bill reflects a pro-active approach to managing blood safety standards and ensuring preparedness for health crises. However, there may be concerns about the state’s lack of reimbursement to local agencies for lost tax revenue due to this exemption, which may raise discussions on budget allocations and financial impacts on local government resources.
While the intent of AB 2989 is widely supported, it does create a point of contention regarding the financial implications for local governments. With the state explicitly stating that there will be no reimbursement for lost tax revenues to local agencies, there is concern about how this might affect local budgets, particularly in areas that may already be financially strained. Additionally, the bill emphasizes the importance of establishing measurable goals and performance indicators to ensure that the intended outcomes, such as increased in-house testing capacity, are effectively met.