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California's legislature has unanimously approved Senate Bill 419, exempting hydrogen fuel from state sales and use taxes starting July 1, 2026. This measure, which aims to enhance the competitiveness of hydrogen against diesel and battery electric vehicles, is backed by the California Hydrogen Coalition and awaits Governor Gavin Newsom's decision.

The exemption, effective until July 2030, applies to hydrogen used in fuel cell and internal combustion vehicles but excludes impacts on local taxes and infrastructure funding. Environmental groups have raised concerns about the timing of this tax relief.