LaMalfa Leads California Republicans Urging Newsom to Grant Small Business Tax Relief

Congressman Doug LaMalfa (R-Richvale) issued the following statement after joining with Congressman Kevin McCarthy (CA-23) to lead a letter to Governor Gavin Newsom urging the state to pass tax relief to allow business owners in California to deduct all business-related expenses paid for with forgiven Paycheck Protection Program (PPP) loan funding on their state taxes, with no deduction cap. Eight other California Republican Congressmen joined the letter. Currently, California small businesses are prohibited from deducting business expenses paid for with forgiven PPP loans on their state taxes.

Rep. LaMalfa said, "Small businesses have already suffered from California's overbearing shutdown policies, and the state's refusal to take steps to prevent small businesses from being taxed again on PPP is another hammer blow. Embarrassingly, California is one of less than ten states in the country who have not moved to prevent their small businesses from being hit with this additional liability. This indifferent attitude by the state is yet another blow to small business owners, employees, and customers, and the state must move expeditiously to protect our small businesses and the many families across California who depend on them."

LaMalfa and McCarthy led every California Member of Congress last month in a letter to Speaker Pelosi asking for a legislative fix to provisions in the $1.9 trillion American Rescue Plan Act, passed this Congress with only Democrat support, that prevent states from passing federal relief on to constituents and small businesses.