WASHINGTON, D.C. – Today, Representative Mike Garcia (CA-25) joined Republican Leader Kevin McCarthy (CA-23), Representative Doug LaMalfa (CA-01), and the rest of the California Republican Delegation in sending a letter to Speaker Nancy Pelosi (CA-12) regarding the current state-of-play surrounding the implementation of the American Rescue Plan Act (ARPA) and AB 80. There are currently incompatibilities between the state legislation and the federal, partisan law that was rushed through, which have left small businesses in California in limbo waiting for promised tax relief.

“We must provide the necessary assistance to California’s small businesses that have suffered from state-mandated lockdowns,” said Garcia. “The partisan rush to pass the American Rescue Plan Act without considering Republican’s concerns has resulted in a law that has left far too many California small business owners in limbo. I’m grateful to Representative LaMalfa and Republican Leader McCarthy for spearheading this effort to help our small businesses and correct the issue created by the American Rescue Plan Act and AB 80. I will continue to fight to ensure that our small businesses have the resources necessary to recover and rebuild after a year of closure.”

The contradicting language between ARPA and AB 80 has left California small businesses in a state of confusion, unable to receive the needed financial relief they thought was on their way.

“A consensus was reached to provide small businesses in California with $6 billion in aid by allowing them to deduct up to $150,000 in business expenses paid with forgiven Paycheck Protection Program (PPP) loans or Economic Injury Disaster Loans (EIDL),” the lawmakers wrote. “Despite this well-known state legislative effort, ARPA contains a contradictory provision that bans States from providing tax relief through December 31, 2024. While Democrats cheered their ability to exclude Republicans from developing ARPA and ignored their concerns, small business owners have been left empty-handed and confused by Democrats’ policies.”

In the letter, the lawmakers ask that the House of Representatives immediately consider the Let States Cut Taxes Act that was recently introduced by Representative Dan Bishop (NC-09) and co-sponsored by Rep. Garcia. This legislation would repeal the provisions with the ARPA that created the current contradictory tax issues.

Click here to read the letter.

Click here to learn more about the Let States Cut Taxes Act.