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California Offering Temporary Tax Relief, Grants for Businesses Impacted by COVID-19

California COVID 300x200 1California will be offering a number of relief options for businesses impacted by COVID-19 restrictions, Governor Gavin Newsom announced on Monday. The state is creating a $500 million COVID-19 relief grant program, and a temporary tax relief program which, if fully utilized, is estimated to have billions in impact. Additionally, the state will expand the California Rebuilding Fund by $12.5 million, bringing the program’s total investment to $37.5 million. These efforts are informed by recommendations made by the Governor’s Task Force on Business and Jobs Recovery.

“California’s small businesses embody the best of the California Dream and we can’t let this pandemic take that away,” Governor Newsom said. “We have to lead with health to reopen our economy safely and sustainably while doing all we can to keep our small businesses afloat. With this financial assistance and tax relief, California is stepping up where the federal government isn’t. By providing potentially billions in immediate relief and support, our small businesses can weather the next month as we continue partnering with the Legislature to secure additional funding and investments in small businesses in the new year.”

New COVID Relief Grant for Small Business

The California Office of the Small Business Advocate (CalOSBA) will be administering the $500 million COVID Relief Grant at the Governor’s Office of Business and Economic Development for small businesses that have been impacted by COVID-19, and health and safety restrictions.

Funds will be awarded to selected intermediaries with established networks of Community Development Financial Institutions to distribute relief through grants of up to $25,000 to underserved micro and small businesses throughout the state by early 2021. Non-profits would also be eligible for these grants.

CalOSBA is establishing the program and will make it available to small businesses as soon as possible—for updates on availability visit https://business.ca.gov/.

Tax Relief Program

In April 2020, the Governor, through Executive Order, allowed taxpayers to apply for penalty and interest relief for 90 days for any taxpayer reporting less than $1 million in sales on their tax return. Through November 22, some 9,287 plans with almost $149 million in tax relief have taken advantage of this program.

The Governor will direct the California Department of Tax and Fee Administration to do the following:

  • Provide an automatic three-month extension for taxpayers filing less than $1 million in sales tax on the return and extend the availability of existing interest- and penalty-free payment agreements to companies (with up to $5 million in taxable sales);
  • Expand interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions; and
  • Broaden opportunities for more businesses to enter into interest-free payment arrangements.

California Rebuilding Fund

Lastly, the state is providing an additional $12.5 million to the California Rebuilding Fund, which helps impacted small businesses rebuild from the economic crisis and keep local economies strong. This program is built to be a resource in the market for the next year as businesses pivot and recover.

The additional funding will help the third party administrator of the fund raise $125 million to make more low-interest loans to small businesses with less access to loans from traditional banking institutions.

This post was originally published on this site

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