Just as small business owners were gaining confidence in the California economy, Los Angeles County public health officials announced masks are required to be worn indoors despite vaccinations, according to media reports.
“It's just adding more confusion and fear,” said John Kabateck, California state director for the National Federation of Independent Business (NFIB). “Small business owners are nervous and apprehensive about a fast reopening and hence their optimism is slow and steady because of a potential resurgence of another virus.”
Owners expecting better business conditions over the next six months rose 14 points to a net negative 12%, which is an improvement but still in very negative territory, according to NFIB’s monthly small business Optimism Index.
“These poor auto shop owners, restaurateurs, bakery owners, and retailers, to name a few, are understandably apprehensive because not only do they have to fear the manmade laws, rules, and regulations but also the potential for another natural disaster that could be looming,” Kabateck told the Southern California Record. “Hopefully, we are seeing this more as conjecture and a very controllable second round of virus.”
As of July 17, 61.1% of residents have been fully vaccinated against COVID-19, according to the state's immunization dashboard.
“Small businesses need certainty and predictability right now, more than anything to be able to get back on track, create jobs and stimulate the economy,” Kabateck said.
Gov. Newsom’s decision to sign Assembly Bill (AB) 150 is expected to help.
"The last thing small businesses want as they're trying to recover and they're seeing more customers coming through the door is to be set back at tax time by massive tax bills," Kabateck said. "The reason it's important is that many small businesses trying to recover from this horrible pandemic are finding that they have expenses that far exceed $10,000."
AB 150 provides for a new elective pass-through tax that is a way for smaller businesses to work around the State and Local Tax (SALT) caps imposed by the 2017 Tax Cuts and Jobs Act.
“It's a really good step in that it allows a business to deduct beyond the state and local taxes of the $10,000 cap and that's going to help give them the ability to invest and reinvest in their businesses,” Kabateck added. “For many of them, the last thing we need when you're trying to crawl out of a hole is to find it being dug deeper and deeper. With this kind of relief realized, they're going to be falling back deeper into a hole that they were in this past 14 months.”