- Cassandra Kester
- (951) 371-6860
SACRAMENTO – Today, the Governor signed Senate Bill 1447 into law. This bill, authored jointly by Senator Steven Bradford (D-Gardena), Senator Anna Caballero (D-Salinas), and Assemblymember Sabrina Cervantes (D-Corona), expands California’s assistance programs for small businesses during the COVID-19 pandemic by establishing a new $100 million small businesses hiring tax credit program.
“California small businesses and their workers are among the hardest hit in the COVID-19 pandemic,” said Assemblymember Cervantes, who chairs the Assembly Committee on Jobs, Economic Development, and the Economy. “Research shows that between March and April of this year, private employment in the US fell by 15.2%. For small firms, however, they experienced a 21.5% loss of jobs, while businesses with over 1,000 employees experienced the fewest job losses (13.3%). As Chair of the Assembly Jobs Committee, I am proud to have worked with my legislative colleagues on this important measure. Addressing employment losses among small businesses is crucial to the state’s economic recovery.”
“For months, I have been working with my colleagues to champion small business relief and I am very proud SB 1447 has been signed into law,” said Senator Bradford. “This bill will help small businesses that are working hard to persist despite COVID-19 by supporting them as they hire or re-hire employees. Small businesses are critical employers and engines of equitable job growth. This is particularly true for Minority, Women, Disabled Veteran, and LGBT business enterprises. This bill will help bring back jobs that were lost in our communities and support small businesses during this difficult period. I am proud to have worked with my legislative colleagues and the Governor on this effort.”
“During this unprecedented economic downturn caused by the COVID-19 pandemic, the State of California must help small business owners to rebuild,” said Senator Caballero. “Small businesses make up the backbone of our economy, and can be a great engine to decrease statewide record unemployment. SB 1447 will put people back to work and allow small businesses that have suffered declining revenues to start hiring again.”
Specifically, SB 1447 allows businesses with 100 or fewer employees to receive a tax credit of $1,000 per net new hire after July 1, 2020, compared to their workforce in the second quarter of 2020. This credit can be applied against personal and corporate income tax liabilities or sales and use tax liabilities for the 2020 tax year. Eligible small businesses must have experienced a 50% decline in gross receipts between 2020 and 2019 (second quarter), and must reserve tax credits beginning December 1, 2020, and before January 15, 2021, with the California Department of Tax & Fee Administration. Total credits to an individual business are capped at $100,000 in maximum credit, and the program total for this tax credit is $100 million.
McKinsey & Company estimate that between 1.4 million and 2.1 million of Californian businesses could close permanently as a result of the disruption experienced in just the first four months of the COVID-19 pandemic. During these unprecedented crises, the State has prioritized supporting small businesses and the individuals that those businesses employ. Other recovery programs already supporting small businesses include a one-year, zero-interest extension on sales and use tax liabilities of up to $50,000, as well as a $150 million expansion of the loan guarantee programs administered by the California Infrastructure & Economic Development Bank (I-Bank), as approved by the Legislature in the 2020 Budget Act.
More information on recovery and support programs available to small businesses can be found here.
Sabrina Cervantes is a mother who proudly represents the 60th District of the California State Assembly, which encompasses the cities of Corona, Eastvale, Jurupa Valley, Norco, a portion of Riverside, and the unincorporated communities of Coronita, El Cerrito, and Home Gardens. Cervantes serves as Chair of the Assembly Committee on Jobs, Economic Development, and the Economy.