Newsom, a Democrat, and legislative leaders said Wednesday that the state will allow companies to deduct up to $150,000 in expenses paid for with funds from PPP loans. California companies took out more than 750,000 such loans, Newsom said.
He said the same tax treatment would apply to deductibility of expenses paid for with funds from federal Economic Injury Disaster Loans. The deductibility issue is part of a broader package meant to help Californians who have suffered economic losses due to the global pandemic.
When passing the Coronavirus Aid, Relief and Economic Security Act


Also in the agreement between Newsom and legislative leaders, the state will increase grants to small businesses fourfold, up to $2 billion from a previous $500 million. It will waive certain fees for restaurants and bars, and provide a $600 cash stimulus to families who qualify for the state's earned income tax credit.
--Editing by Tim Ruel.
For a reprint of this article, please contact reprints@law360.com.