California Gov. Gavin Newsom just signed a bill to help struggling small businesses

California Gov. Gavin Newsom on Wednesday announced the signing of a Senate bill aimed at providing financial relief to struggling small businesses in the state.

Senate Bill 1447, now law, allows businesses with fewer than 100 employees to claim a credit against their personal and corporate income taxes each taxable year, beginning this year, of $1,000 for each net increase in qualified employees, up to $100,000.

To qualify for the credit, the business’ gross income must have declined at least 50% over this time last year, Newsom said, a component that he said is critical to making sure that the money goes to actual struggling small businesses.

“So often, these open-ended tax credits go to a handful of well resourced companies, not necessarily the companies that need it the most,” he said.

On hand for the bill signing, and also speaking Wednesday, was SB 1447’s author, Sen. Anna Caballero, D-Salinas. Caballero said her district is predominantly rural and agricultural and heavily dependent on small businesses, many of which are immigrant-owned.

“Immigrants come to this country looking for the American dream, and, quite frankly, to California looking for the California dream,” she said.

She said the COVID-19 pandemic has placed an incredible burden on small business owners and their families.

“In many instances, they’re wondering if they’re going to survive this pandemic economically, because of the requirement to shelter in place and to keep their families safe,” she said.

Caballero said that the no. 1 issue that she heard from those people was the question of where they were going to get the capital to retain their employees.

“It’s going to be critically important to them to be able to access this resource,” she said.

Newsom also signed two other bills on Wednesday: Assembly Bill 1577, which conforms state law to federal law by excluding gross income Paycheck Protection Program loans that were forgiven by the federal CARES act; and Senate Bill 115, a budget trailer bill that appropriates $561 million in this fiscal year for economic stimulus and to jump-start construction projects.

This story was originally published September 9, 2020 at 2:30 PM.