Governor Signs Small-Business Relief Measures

Gov. Newsom has signed three bills designed to provide economic relief for small businesses.
  • AB 1577 allows small businesses to exclude PPP loans from gross income for state taxes.
  • SB 1447 authorizes $100 million Main Street hiring tax credit program for small businesses.
  • SB 115 budget item includes acceleration of $561 million in state bond funding to help jumpstart construction projects. 

Throughout the legislative session CalCPA met with legislative leaders to outline the need to assist businesses weather the unprecedented financial strain and COVID-related disruptions that have impacted nearly every facet of their business operations. These legislative actions are a product of those efforts.

For example, when the CARES Act passed, CalCPA raised concerns over the inconsistency it created between state and federal tax rules—particularly on the tax treatment of forgiven PPP loans. Raising this issue helped spur AB 1577, which brings California into alignment with current federal tax laws and IRS guidance related to the tax treatment of forgiven PPP loans. This narrow, but important conformity item. will help many businesses that relied on the PPP to survive avoid the possibility of a surprise tax bill.

CalCPA will continue to work with the Legislature and other policy leaders to address the economic challenges facing Californians, understand the options available and help develop meaningful solutions.

Sept. 9, 2020