California businesses are hoping for swift guidance from the U.S. Treasury Secretary to address tax questions, including whether new federal pandemic aid approved in mid-March will change how California taxes earlier relief funding.
California has been trying to pass tax conformity laws but the federal act comes with the provision that it cannot be used for tax cuts. A letter from California Department of Finance Director Keely Martin Bosler to Treasury Secretary Janet Yellen asks for federal clarification and help.
“As we’re seeing tax season roll along, many business groups, as well as Democratic and Republican leaders alike, have been calling on the federal government for this guidance,” John Kabateck, California state director with the National Federation of Independent Business (NFIB) told the Northern California Record. “It would be extremely welcome if not a life preserver for many small businesses.”
Meanwhile a new NFIB Research Center poll shows more than 75% of respondents believe it will be later 2021 or 2022 before business returns to a pre-pandemic level of activity.
It is not yet clear where things stand with a proposed bill, AB 247, which would protect small businesses that follow safety protocols from certain litigation amid the COVID-19 pandemic.
“One frivolous lawsuit can put a mom and pop out of business,” Kabateck said.
“This bill would exempt a small business or nonprofit organization with 100 or fewer employees from liability for an injury or illness to a consumer, as defined, due to coronavirus (COVID-19) based on a claim that the consumer contracted COVID-19 while at that small business or nonprofit organization, or due to the actions of that small business or nonprofit organization,” the bill states.
The bipartisan measure, sponsored by Assemblyman James Ramos, D-Highland, last week was re-referred to the Judiciary Committee.
Kabateck noted it is not known if AB 247 will be placed on the Judiciary Committee agenda, raising concerns it could be headed toward what happened with a similar bill last year.
“We certainly hope that will not be the case,” Kabateck said. “These politicians will find many empty buildings and vacant lots in their districts if they don’t allow a reasonable safe harbor that will protect mom and pops in their backyards.”
Roughly 30 states have passed liability protections for businesses amid the COVID-19 pandemic.