As discussed in my earlier blog this week, in September, Governor Newsom publicly expressed his opposition to new state tax increases. Yesterday, he unveiled his Equitable Recovery for California Businesses and Jobs, that proposes tax relief to small businesses, further emphasizing his message that increasing taxes is not on the agenda.
The Equitable Recovery for California Businesses and Jobs plan contains business and workforce recovery elements, including adding $575 million to the $500 million previously allocated for the California Small Business COVID-19 Relief Grant. The plan includes:
• California Competes Tax Credit (CalCompetes). The new CalCompetes grant program incentivizes businesses to locate in California and to stay, grow and create quality full-time jobs in the state. The program will support job creation and infrastructure investments ($430 million).
• Extended Main Street Small Business Tax Credit to encourage hiring new employees and rehiring former employees ($100 million). As of January 4, nearly 9,000 taxpayers had reserved more than $54 million of the existing credit, according to the Governor’s office.
• Mitigating the state and local tax (SALT) deduction limitation for S-corporation shareholders.
• Expanded sales tax exclusions through the Treasurer’s Office to reduce the cost of manufacturing equipment in order to promote innovation and meet the state’s climate goals ($100 million).
CalChamber echoed support for immediate assistance to struggling small businesses. In a welcomed show of unification, Senate President Pro Tem Toni Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) said:
Californians are hurting and need immediate assistance to weather the current crisis. A unified effort is critical to success and we look forward to working with the Governor on the specifics of his, and legislative, proposals to take early action in providing meaningful additional relief. As we work toward passing a final budget in June, we must continue on the responsible path of ensuring our actions strengthen California and our communities, and not add to the economic challenges we are facing.
Hopefully the rest of the Legislature share the sentiment.