Gov. Gavin Newsom recently announced that California will provide temporary tax relief for eligible businesses impacted by COVID-19 restrictions. The temporary tax relief entails an automatic three-month income tax extension for taxpayers filing less than $1 million in sales tax, extends the availability of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales, and provides expanded interest free payment options for larger businesses affected by restrictions on operations.

The state also launched a new $500 million COVID Relief Grant program and will expand the California Rebuilding Fund by $12.5 million, bringing the total investment to $37.5 million. The programs were implemented based on recommendations 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,” 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.”

 The COVID-19 pandemic has presented a significant challenge to small businesses, employers and employees. A survey in August found that 44% of small businesses are at risk of closing. Data released through the Census Current Population Survey found that minority-owned businesses are disproportionately impacted.

Grants from the new small business program are expected to be distributed in early 2021.

For information, visit business.ca.gov.