Rep. Mike Garcia, R-Santa Clarita, joined nine other Republican members of the House of Representatives from California in sending Gov. Gavin Newsom a letter urging him to “provide full state tax deductibility for business owners that used the Paycheck Protection Program (PPP) loan funding to cover business expenses,” according to a news release from the congressman’s office.
“It is our hope that this situation is not compounded by further efforts to delay relief to California’s small businesses and workers,” the 10 Republican lawmakers wrote in their letter. “Rather than limiting state tax conformity laws to a cap on business expense deductions, we believe your leadership is necessary to ensure the state Legislature passes tax relief allowing business owners in California to deduct all business-related expenses paid for with forgiven PPP loan funding on their state taxes, with no deduction cap, in conformity with the provisions established in Public Law 116-260 with regard to federal taxes.”
California Assembly Bill 80, which would allow businesses to deduct forgiven PPP loans from their state taxes, received the full state Senate’s approval Monday. The amended bill will head back to the Assembly floor for a vote before hitting the governor’s desk.