HomeMy WebLinkAbout1LCITY COUNCIL STAFF REPORT
DATE: APRIL 8, 2021 CONSENT CALENDAR
SUBJECT: LETTER CALLING FOR THE STATE TO TAX-EXEMPT LOCAL
GOVERNMENT COVID-19 RELIEF PAYMENTS TO RESIDENTS AND
BUSINESSES
FROM: David H. Ready, City Manager
BY: Anthony J. Mejia, MMC, City Clerk
RECOMMENDATION:
Authorize the issuance of a letter to the Governor and local state representatives calling for
immediate action to tax-exempt local government COVID-19 relief payments paid to
residents and businesses.
BACKGROUND:
At the request of Councilmember Kors, the City Council is requested to consider issuing a
letter to Governor Newsom and local state representatives calling for immediate action to
tax-exempt local government COVID-19 relief payments paid to residents and businesses.
Similarly, Congress has recently clarified that the economic impact payments (stimulus
payments) and Paycheck Protection Program funds are tax-exempt and not taxable income.
FISCAL IMPACT:
There is no fiscal impact as a result of issuing this letter.
David H. Ready, E~· .. -----.....
City Manager
Attachments:
1. Draft Letter
ITEMNO._\_L __
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April 8, 2021
The Honorable Gavin Newsom
Governor of California
1303 10 th Street, Suite 1173
Sacramento, CA 95814
Re: State Income Tax Exemption for Local Government COVID-19 Relief Payments to
Residents and Businesses
Dear Governor Newsom:
On behalf of the City of Palm Springs, we are writing to urge your consideration and action to
exempt COVID-19 relief payments from local governments to residents and businesses from
state income taxes. The City of Palm Springs has allocated considerable funds to aid residents
and businesses through rental assistance programs and direct payments to small businesses.
These funds are intended to provide much needed relief and it would be counter to the purpose
for the state to collect taxes on these relief funds. Similarly, Congress has clarified that the
economic impact payments and Paycheck Protection Program funds are tax-exempt and not
taxable income.
For these reasons, the City of Palm Springs calls upon state representatives to take immediate
action to exempt COVID-19 relief payments to residents and businesses. Please do not hesitate
to contact the City Manager at (760) 322-8362 or email citymanager@palmspringsca.gov if you
need additional information.
Sincerely,
cc: Assembly Member Chad Mayes, District 42
Senator Melissa A. Melendez, District 28
Executive Officer, California Franchise Tax Board
Executive Director, League of California Cities
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