Laws & Legislation


05 01 2013

05 01 2013

California Halts Tax Break for Small Business Owners

Small business owners who are starting out often seek funding through a small business loan or other lending option that allows them to grow and eventually gain a reasonable return on investment. However, even if sales are going well, tax increases can make it difficult for a small business to achieve success and keep cash flow running smoothly.

That nightmare looks set to become a reality for many small businesses in California. A new, retroactive tax bill in the state could force small business owners to pay up to $150 million in back taxes from the past five years. For the last two decades, a California law allowed small business owners to receive a 50 percent tax break on earnings, but the retroactive tax bill would reverse this incentive.

Many entrepreneurs decried the state’s move and called the bill unfair, particularly since the bill would eradicate a tax incentive that has benefited small business owners for 20 years.

Some small business owners fear changing the law sends a bad message to potential entrepreneurs in California. Others feel it places an unreasonable demand on smaller companies, especially since so many are still reeling from the effects of a lengthy economic recession.

To protest the bill, entrepreneurs throughout the state have banded together to form coalitions and appeal the legislation.

Small business owners who need funds to meet all the new demands to their finances can contact National Funding about securing a small business loan or merchant cash advance.


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