California
California Democrats propose $100 million in tax breaks for companies rehiring workers
California small businesses could tap into new tax credits if they or rehire employees over the next three months under a coronavirus economic stimulus proposal released by California Democrats late Thursday.
The proposal from Sen. Steven Bradford, D-Gardena, would set aside $100 million to give tax credits to companies with fewer than 100 employees. Lawmakers have just four days to debate it before their 2020 legislative session ends.
Businesses could get the money if they add workers to their payroll and if they lost at least 50% of their typical revenue during the early months of the COVID-19 outbreak, from April 1 to June 30.
The proposal, Senate Bill 1447, would establish the baseline for a company’s headcount as the bottom of California’s coronavirus recession, from April 1 to June 30. The state’s unemployment rate was 16.4% percent in April and 16.3% in May, according to the Employment Development Department.
Companies would be eligible for a tax credit of $1,000 for each employee hired above that baseline between July 1 and Nov. 30. A company could receive as much as $100,000 in credits that it could use to offset taxes owed to the state through 2026.
The proposal comes two months after Gov. Gavin Newsom signed a state budget that attempted to narrow the sudden deficit brought on by the coronavirus outbreak by cutting state workers’ pay, spending money from reserves and delaying billions of dollars in payments to schools. The Newsom administration anticipates another $8.7 billion deficit next year.
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