California Gov. Gavin Newsom signed a bill that will give small businesses hit hardest by this pandemic a $6.2 billion tax cut over the next six years.
This legislation is intended to assist small businesses as they recover from economic losses due to the COVID-19 pandemic.
Under this bill, many California businesses will not have to pay state taxes on their federal pandemic loans. The measure, Assembly Bill 80, aims to help businesses that received loans through the Paycheck Protection Program survive the COVID-19 pandemic shutdown.
This program has been designed so businesses have their loans, which will not be counted as taxable income, forgiven. These businesses will not have to pay the money back if they use these loans on qualifying expenses like employee wages, rent and utilities.
In addition, small businesses must show at least 25% reduction in profits for at least one quarter as a result of the pandemic. This bill also applies to Economic Injury Disaster Loan advance grants, another federal aid program that targeted business in low-income communities.
This bill applies for taxable years beginning on or after Jan. 1, 2019.
Link to the Governor’s Press Release: Governor Newsom Signs Bill Giving Small Business a $6.2 Billion Tax Cut | California Governor
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