Expected action by Gov. Newsom on workaround of SALT caps would enhance positive outlook
SACRAMENTO, Calif., July 13, 2021—The release today of NFIB’s monthly small business Optimism Index showed an improving national Main Street economy, something the California state director for the association that took the poll said Gov. Gavin Newsom could greatly enhance by signing the budget trailer bill that includes Assembly Bill 150, which contains a new elective tax for pass-through entities that is a way for smaller businesses to work around the State and Local Tax (SALT) caps slapped on them by the 2017 Tax Cuts and Jobs Act.
“We are still in very uncertain economic times, so messages are more important than they would be during calmer periods,” said John Kabateck, California state director for the National Federation of Independent Business (NFIB), which conducts the monthly Small Business Economic Trends report, also known as the Optimism Index. “Signing the budget trailer bill that includes AB 150 would send a strong signal to the Golden State’s job-creating entrepreneurs that Sacramento is taking genuinely vital steps toward COVID recovery, and it would nicely complement the governor’s earlier signing of Assembly Bill 80, which partially conforms state tax law to the federal government’s regarding the forgivability of PPP loans.”
From NFIB Chief Economist Bill Dunkelberg
“Small businesses optimism is rising as the economy opens up, yet a record number of employers continue to report that there are few or no qualified applicants for open positions. Owners are also having a hard time keeping their inventory stocks up with strong sales and supply chain problems.”
Key findings include:
- Owners expecting better business conditions over the next six months rose 14 points to a net negative 12%, an improvement but still in very negative territory.
- Earnings trends over the past three months improved six points to a net negative 5%.
- The net percent of owners raising average selling prices increased seven points to a net 47% (seasonally adjusted), the highest reading since January 1981.
For 78 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
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