Please ensure Javascript is enabled for purposes of website accessibility
Now Hiring: California Offers Credits To Small Businesses
gvw_ap_news
By Associated Press
Published 5 years ago on
September 10, 2020

Share

SACRAMENTO — With millions of people out of work in California, Gov. Gavin Newsom on Wednesday signed a law giving tax breaks to small businesses that hire more workers by Dec. 1.

The law will reduce how much state taxes some small businesses owe if they have more employees working between July 1 and Dec. 1 than they did between April 1 and June 30. Businesses of 100 employees or less would get a $1,000 credit for the net increase of each new worker.

The law will reduce how much state taxes some small businesses owe if they have more employees working between July 1 and Dec. 1 than they did between April 1 and June 30. Businesses of 100 employees or less would get a $1,000 credit for the net increase of each new worker.

It only applies to businesses that have lost at least half of their revenue from April to June this year compared to the same time period last year. The credit is capped at $100 million statewide, or $100,000 for each business. Businesses get the credit only if they hire employees, not contractors. Small businesses that are owned by large companies are not eligible.

Newsom called it “one of the most significant tax credits in our state’s history” because of the provisions that restrict the benefits to small businesses impacted by the pandemic.

“So often these open-ended tax credits go to a handful of well resourced companies, not necessarily those small businesses that need them the most,” Newsom said while visiting Solomon’s Delicatessen, a small business in Sacramento.

California’s economy has been devastated by the coronavirus pandemic as the Newsom administration ordered many businesses to close for months to slow the spread of the disease. Californian lost 2.4 million jobs in April, more than all the jobs lost during the Great Recession a decade ago. The state has added back nearly a third of those jobs since then, but the unemployment rate is still 13.3% — higher than it ever got during the Great Recession.

Businesses Can Also Use the Credit To Lower the Amount of Sales Taxes They Have To Send To the State

As of Tuesday, the state lists 33 of the state’s 58 counties as the most at risk for the coronavirus, a designation that requires many businesses to halt indoor operations.

Unlike most tax breaks, businesses can also use the credit to lower the amount of sales taxes they have to send to the state. The goal is to help retailers what don’t pay much in income taxes but collect lots of sales taxes.

“There was a commitment among all of us to make sure that our small businesses come back,” said state Sen. Anna Caballero, a Democrat from Salinas who co-authored the bill along with Sen. Steven Bradford, a Democrat from Gardena. “We absolutely need to see them be successful and this is going to be one of the tools.”

Earlier this year, California allowed businesses with less than $5 million in taxable sales keep up to $50,000 of sales collections for the next year. It’s essentially a no-interest loan to these businesses. Wednesday, Newsom said the program has provided $106 million so far for these businesses.

Newsom also signed two other laws on Wednesday. One law exempts businesses from having to pay state taxes on loans received from the federal Paycheck Protection Program. The other law is an amendment to the state budget that, among other things, authorizes the state to spend various bond funds.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

US Judge Temporarily Stops West Texas Immigrant Deportations Under Alien Enemies Act

DON'T MISS

Shedeur Sanders’ Long Wait Ends When Browns Take Him in the 5th Round of the NFL Draft

DON'T MISS

Only About Half of Republicans Say Trump Has Focused on the Right Priorities

DON'T MISS

ICE Deports the Mother of an Infant and a 2-Year-Old Who Is a US Citizen

DON'T MISS

Israeli Airstrike Kills 10 People, Half of Them Children

DON'T MISS

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

DON'T MISS

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

DON'T MISS

Paul Skenes Strikes Out 9, Wins Duel With Yamamoto in Pirates’ Victory Over Dodgers

DON'T MISS

Eovaldi Outlasts Verlander as Rangers Beat Giants

DON'T MISS

Rams Take Oregon Tight End Terrance Ferguson in Second Round After Trading Out of First

UP NEXT

Israeli Airstrike Kills 10 People, Half of Them Children

UP NEXT

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

UP NEXT

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

UP NEXT

Paul Skenes Strikes Out 9, Wins Duel With Yamamoto in Pirates’ Victory Over Dodgers

UP NEXT

Eovaldi Outlasts Verlander as Rangers Beat Giants

UP NEXT

Rams Take Oregon Tight End Terrance Ferguson in Second Round After Trading Out of First

UP NEXT

The Latest: Francis Is Remembered as a ‘Pope Among the People’ as He Is Laid to Rest

UP NEXT

Trump Now Doubts Putin Wants to End Ukraine War, a Day After Saying a Deal Was Close

UP NEXT

Virginia Giuffre, Voice in Epstein Sex Trafficking Scandal, Dies at 41

UP NEXT

California Proposes Allowing Testing of Self-Driving Heavy-Duty Trucks

ICE Deports the Mother of an Infant and a 2-Year-Old Who Is a US Citizen

4 hours ago

Israeli Airstrike Kills 10 People, Half of Them Children

4 hours ago

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

4 hours ago

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

4 hours ago

Paul Skenes Strikes Out 9, Wins Duel With Yamamoto in Pirates’ Victory Over Dodgers

4 hours ago

Eovaldi Outlasts Verlander as Rangers Beat Giants

4 hours ago

Rams Take Oregon Tight End Terrance Ferguson in Second Round After Trading Out of First

5 hours ago

The Latest: Francis Is Remembered as a ‘Pope Among the People’ as He Is Laid to Rest

5 hours ago

ICE Is Reversing the Termination of Legal Status for International Students Around the US

6 hours ago

Trump Is a Revolutionary. Will He Succeed or Fail?

6 hours ago

US Judge Temporarily Stops West Texas Immigrant Deportations Under Alien Enemies Act

A federal judge in west Texas joined other courts in temporarily blocking the deportations of Venezuelan immigrants under an 18th-century wa...

11 minutes ago

11 minutes ago

US Judge Temporarily Stops West Texas Immigrant Deportations Under Alien Enemies Act

18 minutes ago

Shedeur Sanders’ Long Wait Ends When Browns Take Him in the 5th Round of the NFL Draft

3 hours ago

Only About Half of Republicans Say Trump Has Focused on the Right Priorities

4 hours ago

ICE Deports the Mother of an Infant and a 2-Year-Old Who Is a US Citizen

4 hours ago

Israeli Airstrike Kills 10 People, Half of Them Children

4 hours ago

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

4 hours ago

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

4 hours ago

Paul Skenes Strikes Out 9, Wins Duel With Yamamoto in Pirates’ Victory Over Dodgers

Help continue the work that gets you the news that matters most.

Search

Send this to a friend