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Updated April 4th, 2020 at 11:48 IST

California to aid small businesses hit by virus

Walkways and piers along the beaches of Southern California are largely empty and silent - as residents and visitors heed the local warnings and stay-at-home advisories of a state on virus lockdown.

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Walkways and piers along the beaches of Southern California are largely empty and silent - as residents and visitors heed the local warnings and stay-at-home advisories of a state on virus lockdown.

In Huntington Beach, about 36 miles south of Los Angeles, the impact of the virus pandemic has left business and restaurants, normally bustling with patrons, equally empty and silent.

California is in its second week of a statewide lockdown, where schools and nonessential businesses are closed and the governor has ordered people to stay home.

Small business statewide are feeling the impact of the virus-driven slowdown.

In response, California's governor on Thursday said small businesses can keep up to $50,000 in sales tax receipts for the next year as the COVID-19 outbreak has forced people to stay home and many shops to close.

The move means businesses with $5 million in sales or less will get up to a year to give the state up to $50,000 in sales taxes they collect from customers.

It's essentially an interest-free loan aimed at keeping small businesses afloat in a state where the governor has ordered everyone to stay home to prevent the spread of a virus that has so far killed 233 people.

The action could have a significant impact on state and local budgets, as sales taxes make up a big part of government bank accounts. State officials could not say how much it would cost over the next year, noting the only money lost would be interest payments.

As of Thursday, at least 20,000 businesses had asked the state for a 90-day delay in sales tax payments.

The action comes as more than 1.9 million Californians have filed for unemployment benefits since March 12, an average of more than 111,000 claims per day over the last week.

For those looking for work, the state has partnered with three companies - LinkedIn, Salesforce and Bitwise - to launch a website matching people with job listings in California. Newsom said the website, onwardca.org, already has more than 70,000 job listings.

Most are in the health care, agriculture, logistics and grocery industries - essential businesses not affected by the statewide “stay-at-home” order.

The sales tax relief Newsom announced Thursday is one of a series of government actions aimed at calming mounting financial anxiety across the state. Also on Thursday, Newsom ordered water systems not to shut off service for non-payment.

While business groups have cheered the sales tax relief, local governments worried the deferment could cost them precious revenue they need to respond to the COVID-19 outbreak.

At least one source of local tax money has not been touched: property taxes. State officials have given Californians an extra three months to file their state income taxes. But the state has not budged on an April 10 property tax deadline. Newsom said Thursday local governments have asked him not to waive that deadline because it is such an important source of revenue for them.

California has more than 10,646 confirmed COVID-19 cases, according to data compiled by Johns Hopkins University. The state has had 233 deaths, including a 15-year veteran of the Riverside County Sheriff's Department who left behind a wife and four children

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death.

 

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Published April 4th, 2020 at 11:48 IST

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