Gov. Gavin Newsom signed two bills into law on Sept. 9 to help small businesses dealing with the effects of COVID-19.
Small businesses can exclude Paycheck Protection Program loans from gross income for state taxes with AB 1577.
“Small businesses need protection,” Assemblywoman Autumn Burke, a Los Angeles Democrat, said in a press release.
“They are taking the brunt of the economic impact created by COVID-19. The federal Paycheck Protection Program was designed to help businesses stay afloat during this crisis, and AB 1577 furthers that goal by preventing surprise tax bills and easing administrative burdens for thousands of California’s small businesses.”
Redlands Chamber of Commerce Director Chris Alvarez said AB 1577 makes sense.
“It conforms state law to federal law,” he said. “Without that, I think we might have experienced significant tax liability issues.”
A $100 million hiring tax credit program for qualified small businesses was authorized with SB 1447.
The hiring credit is equal to $1,000 for each net increase in qualified employees, up to $100,000 for each qualified small business employer.
“Small businesses are critical employers and engines of equitable job growth,” said state Sen. Steven Bradford, another Los Angeles Democrat.
“This is particularly true for minority, women, disabled veterans and LGBT business enterprises. This bill will help bring back jobs that were lost in our communities and support small businesses during this difficult period.”
Alvarez said the point of SB 1447 is to assist the state with economic recovery.
“It is a way to begin incentives for businesses to stay the course and try to hire back or hire more employees,” he said.
According to the state, the Small Business Majority survey data found that up to 44% of businesses are at risk of shutting down. From Feb. to April, there was a 22% drop of active business owners nationwide. Minority-owned businesses are disproportionately impacted. The number of active businesses owned by African Americans dropped by 41%, Latin by 32%, Asians by 25% and immigrants by 36%.
Alvarez said Redlands businesses have struggled during the pandemic.
“Some chamber members were forced to shut down,” he said. “In 2008, it was different because no one was forced. Day spas and salons continue to be impacted.
“It almost isn’t worth it to reopen under the new guidelines with all the added costs. It has also been a reckoning for restaurants.”