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“href =” https://www.law360.com/tax-authority/articles/1365175/# “> Paul Williams · March 15, 2021 at 5:50 p.m. EDT
California will await federal guidance on the newly signed Coronavirus Relief Act before proceeding with bill to further align the state with the federal tax treatment of certain loans, the governor and lawmakers announced.
Democratic Governor Gavin Newsom and top Democrats in the State Assembly and Senate said in a statement Friday that they had temporarily postponed legislative discussions on compliance with federal treatment of paycheck protection loans until the US Treasury Department issues guidelines on the US bailout have action . The new law places certain restrictions on the states that use it Charge federal aid Lower taxes.
California passed a law in September exclude permitted companies PPP loan amounts under the Federal Coronavirus Aid, Assistance and Economic Security Act for state tax purposes, but refused to allow the company to deduct the cost of the loan. A pending invoice, AB 80, would allow companies to deduct up to $ 150,000 in business expenses paid through PPP loans and would provide an exclusion for loans issued under the Consolidated Appropriations Act of December .
According to an analysis of the bill, which the Assembly has passed and awaits action in the Senate, AB 80 will cost the state approximately $ 6 billion in tax revenue over six fiscal years.
“Legislation on federal tax treatment of these grants is being temporarily delayed while we seek detailed instructions from the US Treasury Department,” said Newsom, Senate President pro Tempore Toni Atkins, San Diego, D, and assembly spokesman, Anthony Rendon. D-Lakewood said.
– Additional coverage from Asha Glover. Adaptation by Neil Cohen.
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