Sales tax extension for small businesses
Small businesses in California will get more time to turn over sales tax collections to the state, allowing them to use those dollars “for any obligations you may have,” Gov. Gavin Newsom said Nov. 30.
The sales tax extension is one of three new measures to prop up small businesses. Newsom also said an emergency appropriation will be used to give small businesses up to $25,000 in cash grants.
In addition, more cash is being set aside for a new business rebuilding fund that’s the brainchild of Janet Yellen, a member of Newsom’s business advisory task force and President- elect Joe Biden’s nominee for U.S. treasury secretary.
As COVID-19 cases continue to rise and more restrictions look imminent, more action is needed to protect nonessential businesses like restaurants, hair and nail salons, bars and other hospitality businesses, Newsom said.
“We have to be more mindful than ever about the economic impact and consequences of these further restrictions,” he said.
The plan could provide billions of dollars in temporary tax relief, the governor’s office said in a statement. It extends an executive order Newsom signed in April that granted about $149 million in tax relief to nearly 10,000 small businesses that applied for it.
Newsom’s office said he will direct the state Tax and Fee Administration Department to grant automatic three-month extensions to small businesses with $5 million or less in sales and up to $1 million in sales tax collections.
Inmates linked to EDD fraud
California sent about $400 million in fraudulent unemployment benefit payments to state prisoners, a state official said Tuesday, nearly triple the amount disclosed last month and a number that could grow as a criminal investigation continues.
Nine county district attorneys and a federal prosecutor are investigating unemployment fraud involving payments from the California Employment Development Department, which was under intense pressure to quickly process millions of claims as the economic impact from the coronavirus intensified last spring.
Criminals took advantage by submitting numerous fraudulent claims, many of which were approved by the state. Prosecutors discovered the fraud included inmates working with people outside the prisons and last month estimated $140 million was paid to about 20,000 prisoners between March and August.
But Crystal Page, spokeswoman for the California Labor and Workforce Development Agency that oversees the unemployment office, said a review of records now pegs the figure at about $400 million.
The new number includes not just the base benefits of $450 per week but also additional aid Congress approved during the pandemic — $600 per week for four months plus $300 a week for six weeks after that.
In all, records show benefit claims were submitted in the names of 31,000 inmates. About 20,800 inmates were paid and another $80 million in claims involving the other prisoners were not, according to Page.
The new figure came after comparing jobless claims data with the Social Security numbers of state prison inmates. That part of the investigation was slowed — to the great frustration of prosecutors — because of a state law that forbids the prison system from giving out inmates’ numbers.
State officials got around that law by convincing the Office of the Inspector General at the U.S. Department of Labor to issue a subpoena for the information in late September, according to Dana Simas, press secretary for the California Department of Corrections and Rehabilitation.
California OK’D benefits for at least 133 inmates on death row, including some of the state’s most notorious serial killers. Prosecutors said someone filed a claim in the name of Scott Peterson, who was convicted and sentenced to death for the murder of his pregnant wife following a trial that gripped the nation.
It’s unclear how many inmates actually got the money.