News from the GCVCC Business Legislative Advocacy Committee

Sacramento, CA: The long-awaited $900 billion economic Covid-19 relief package approved by Congress in December made an important tax change that allows businesses to deduct expenses covered by the Paycheck Protection Program loans. Prior to the adjustment by the Feds, businesses that received a PPP loan and spent the money on payroll and rent would not be able to deduct those expenses, which threatened to expose them to significant tax burden.

The State of California is currently reviewing law that would mirror the moves made by the federal government, but the proposal is still working its way through the State Legislature.  There seems to be bipartisan agreement that the proposal(s) have a good chance to become law, but it will take time to work through the legislative process.  If the action moves through the traditional legislative route, we may not see an answer on the subject until summer.  Its possible for quicker movement if it gets attached to a budget action, but that remains to be seen.

The bottom line for our Coachella Valley business community?  If you received a PPP loan you may want to consult with your CPA about the practicality of filing for an extension in anticipation of the State Legislature taking action later this year.

The chamber regularly supplies its members with legislative updates as part of their advocacy efforts at the federal, state and local level, for informational purposes only.  As always, members should consult with legal or financial experts on how laws and potential legislation could impact them prior to making related business decisions.