Newsom unveils tax breaks and cash grants for small businesses – Orange County Register
Small California businesses will have more time to remit the collection of sales tax to the state, which will allow them to use those dollars “for any obligations you may have,” Gov. Gavin Newsom announced Monday. November, during an online press briefing.
The sales tax extension is one of three new measures to support small businesses.
Newsom also said emergency credit would be used to give small businesses up to $ 25,000 in cash grants.
Additionally, more money is being set aside for a new corporate rebuilding fund designed by Janet Yellen, a member of Newsom’s Business Advisory Working Group and candidate for President-elect Joe Biden for Secretary of the Treasury. .
With other shelter-in-place orders are likely and California counties slipping into the hardest-hit purple level, more measures are needed to protect non-essential businesses such as restaurants, hair and nail salons, bars and other hotel businesses, Newsom said.
“We must be more attentive than ever to the economic impact and the consequences of these new restrictions,” he said.
The plan could provide billions of dollars in temporary tax relief, the governor’s office said in a statement.
It extends an executive order signed by Newsom in April that granted around $ 149 million in tax relief to nearly 10,000 small businesses that requested it.
Newsom’s office said it would ask the state’s tax and fee administration department to grant automatic three-month extensions to small businesses with revenue of $ 5 million or less and up to $ 1 million in sales tax collection.
Large businesses affected by COVID-19 restrictions may also apply for tax payment extension plans.
The extensions are equivalent to “a float,” Newsom said.
“You can keep this money. You can use this money for all your obligations, ”he said. To apply, “just fill out a form”.
Sales tax reporting dates vary by business, with tax payments due monthly, quarterly, or annually.
Outgoing State Senator John Moorlach, R-Costa Mesa, noted that while a tax deferral will help retailers and restaurants, it will not help those who do not collect sales taxes.
“It’s an interesting strategy,” he said of Newsom’s plan. But, he added, “if you have a service like an accountant or a lawyer, you don’t generate sales tax. It is not universal.
Under a separate $ 500 million “COVID relief grant program”, cultural institutions and nonprofits, as well as small businesses, can apply for up to $ 25,000 in cash grants .
Newsom will also increase the state’s $ 25 million commitment to the California Rebuilding Fund by $ 12.5 million.
The fund – proposed by the 80-member Governor’s Task Force on Business Recovery and Jobs – is a public-private partnership designed to make capital available to businesses over the next year to grow. recover from losses caused by the pandemic. The program will provide loans of up to $ 100,000 through community lenders.
Newsom’s office said the fund is expected to grow to $ 125 million with money from private, philanthropic and public sources.
Increased support for small businesses will emerge from the next state legislative session, Newsom said, including incentives to retain existing employees and hire new ones. Other proposals would remove or reduce fees for heavily affected businesses like bars, restaurants and barbershops and increase spending on infrastructure and economic development programs.
“These programs (announced on Monday) will be a bridge over the next two weeks to what we will be working on with the legislature,” Newsom said. “We have a whole list of things we’re actively engaged in. “
Newsom touted the business initiatives already taken, including state and local payments to restaurants that have provided nearly 18 million free meals to seniors. The state has also provided up to $ 100 million in disaster relief loan guarantees to businesses with no established credit.
But not all of that relief will be enough support without additional help from the federal government, which passed its latest relief plan – the CARES Act – seven months ago.
“We cannot wait,” Newsom said. “We must act on these supports to help these small businesses which put everything at stake.”