California Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins, and Assembly Speaker Anthony Rendon have reached an agreement on a relief package for individuals, families, and businesses suffering economic hardships from the pandemic.
The agreement reflects an increase from $500 million to more than $2 billion for grants up to $25,000 for small businesses impacted by the pandemic, and also allocates $50 million for cultural institutions. The agreement also partially conforms California tax law to new federal tax treatment for loans provided through the Paycheck Protection Plan, allowing companies to deduct up to $150,000 in expenses covered by the PPP loan. More than 750,000 PPP loans were taken out by California small businesses. This tax treatment would also extend to the Economic Injury Disaster Loans as well.
In addition, the agreement provides for two years of fee relief for roughly 59,000 restaurants and bars licensed through the state’s Department of Alcoholic Beverage Control that can range annually from $455 to $1,235.
“As we continue to fight the pandemic and recover, I’m grateful for the Legislature’s partnership to provide urgent relief and support for California families and small businesses where it’s needed most,” said Governor Newsom, in a statement. “From child care, relief for small business owners, direct cash support to individuals, financial aid for community college students and more, these actions are critical for millions of Californians who embody the resilience of the California spirit.”