AB 80 authored by Assemblywoman Autumn R. Burke (D-Inglewood) was passed out of the Assembly and is now headed to the Governor for signature.
AB 80 conforms California to federal law, ensuring that no one will pay taxes on forgiven Paycheck Protection Program loans. Additionally, the bill allows for those that had a 25% reduction in gross receipts and are not publicly traded companies, a deduction for all expenses paid for using the forgiven PPP loans. The Department of Finance estimates that the full deduction would be provided to about 75% to 85% of PPP loan recipients.
AB 80 is the result of months of hard work while the state waited for guidance from the Federal Government on how to give businesses this much-needed tax relief, without jeopardizing billions of Federal aid dollars.
According to Assemblywoman Burke, who chairs the Assembly Committee on Revenue and Taxation, “AB 80 provides significant and immediate tax relief to California businesses devastated by the coronavirus pandemic.”
Assemblywoman Burke further stated, “With 76 co-authors from the Assembly and the Senate, this bill shows that the legislature and the administration understands the importance of business to our state and our strong desire to be good partners, not only with our job creators, but with each and every Californian they employ.”
Last year, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which, among other things, created the Paycheck Protection Program. The program provided businesses loans that could later be forgiven if the funds were spent on specific expenses such as payroll, rent, and utilities.