Many California businesses won’t have to pay state taxes on their federal pandemic loans under a bill Gov. Gavin Newsom signed into law Thursday.
The measure, Assembly Bill 80, aims to help businesses that received loans through the Paycheck Protection Program, which the federal government established to help businesses survive the COVID-19 pandemic shutdown.
Newsom’s office described the law as “providing a $6.2 billion tax cut” for small businesses hurt by the coronavirus pandemic.
“This state is poised for a major comeback,” Newsom said just before signing the bill into law at a sushi restaurant in San Fernando. “We’re experiencing that comeback because of the small business leaders that persevered.”
Under the program, businesses can have their loans forgiven, meaning they don’t have to pay the money back, if they use the money on qualifying expenses like employee wages, rent and utilities.