As Stanislaus County prepares to shelter in place once again following Gov. Gavin Newsom’s regional stay-at-home order, Turlock businesses affected by the impending shutdown can apply for aid through grant funding and tax relief made available by the state.
Immediate, temporary tax relief announced by Newsom on Nov. 30 includes an automatic three-month extension for taxpayers filing less than $1 million in sales tax, as well as payment options for larger businesses. In addition, California will also provide $500 million in new COVID-19 Relief Grant funding for small businesses. The assistance comes as Americans wait for the federal government to provide additional financial stimulus support to main street businesses.
“California’s small businesses embody the best of the California Dream and we can’t let this pandemic take that away,” 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.”
On top of the three-month income tax extension for taxpayers filing less than $1 million in sales tax, the availability of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales will also be extended. The temporary relief also provides expanded interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.
The total tax relief, if fully utilized, is estimated to have billions in impact and was informed by recommendations made by the Governor’s Task Force on Business and Jobs Recovery.
The latest California relief package was announced prior to businesses learning that regional stay-at-home orders would be implemented if an area’s ICU capacity drops below 15%, which could be a matter of days for a majority of the state.
Upon the announcement of the fast-approaching shutdown, the California Chamber of Commerce, along with more than 100 local chambers, sent a letter to the California Congressional delegation asking for an extension of the Paycheck Protection Program as well as forgiveness of the federal loan California has received for unemployment benefits.
According to CalChamber, this now $20 billion loan is repaid with higher employer taxes and is expected to grow as a result of the new shelter in place order.
“It is incredibly difficult to balance public health needs against the ability of small businesses to stay open and workers to support their families,” CalChamber President and CEO Allan Zaremberg said. “Small business revenues will now be a function of hospital capacity and we need every Californian to support small business by practicing responsible behavior.
“The loss of revenue many small businesses will experience as a result of this latest shutdown could be catastrophic. We appreciate that the Governor has allowed retail to stay open even if it is at a reduced capacity. With so many small businesses relying on revenue from the holiday shopping season, we are encouraging people to take advantage of local retail establishments to do their holiday shopping.”
Small businesses are drivers of economic growth, creating two-thirds of new jobs and employing nearly half of all private sector employees. California is home to 4.1 million small businesses, representing 99.8% of all businesses in the state and employing 7.2 million workers in California, or 48.5% of the state’s total workforce.
The COVID-19 pandemic has presented a significant challenge to small businesses, employers and employees. An August Small Business Majority survey data found that 44% of small businesses are at risk of shutting down. Data released through the Census Current Population Survey found that minority-owned businesses are disproportionately impacted: the number of active businesses owned by African-Americans dropped by 41%, Latinx by 32%, Asians by 25% and immigrants by 36%.
In Turlock, City Manager Toby Wells said 232 businesses have applied for the City’s Small Business Relief Grant Program, though that number could fluctuate as more applications come through the mail and incomplete applications are disqualified. The application period was open through Nov. 30, and the program will distribute $800,000 of CARES act funding to Turlock businesses of all sizes.
The most recent assistance announcements build on the state’s ongoing business support throughout the pandemic, including the Main Street Hiring Tax Credit, which authorizes $100 million in hiring tax credit for qualified small businesses. The credit is equal to $1,000 per qualified employee, up to $100,000 for each small business employer. Applications opened Dec. 1.
For a complete list of resources available to businesses, visit https://covid19.ca.gov/business-and-employers/