California furniture stores don’t need higher taxes

Image shows a graphic of two people are a wall of tax terms

Many furniture retailers in California were hit hard by business closings and other restrictions triggered by COVID-19 outbreaks. The last thing they need is a tax increase.

But that’s what a bill pending in the State Assembly would give them. AB 1253, introduced last year to create local grant programs, recently was overhauled by Assemblyman Miguel Santiago of Las Angeles. Now it imposes a retroactive surcharge on taxable personal income over $1 million.

Many small businesses pay personal income taxes as sole proprietorships.

Santiago replaced the original content of AB 1253 with language that raises tax rates retroactive to Jan. 1, 2020 – before the COVID-19 impact hit businesses and individuals in this country. It adds these surcharges:

  • 1 percent on taxable income over $1 million but less than $2 million;
  • 3 percent on taxable income over $2 million but less than $5 million; and
  • 3.5 percent on taxable income over $5 million.

CalChamber calls bill raising taxes a ‘job-killer’

The bill would be expected to take in revenue of nearly $7 billion annually – much of that coming from the earnings of small businesses, including furniture stores.

CalChamber, which has labeled AB 1253 a “job-killer” bill, notes that California already imposes the highest income-tax rates in the country.

“Currently, the highest state tax rate for individuals and sole proprietors is 13.3 percent,” it wrote July 31. “If AB 1253 were enacted, the 13.3 percent rate would rise to 14.3 percent for incomes above $1 million and the state’s highest rate would be raised to 16.8 percent for incomes above $5 million.”

This measure likely will have a damaging effect on some Home Furnishings Association members and their efforts to keep employees on payroll. They should contact their Assembly representatives and urge them to oppose AB 1253. Assembly members can be found here.

[California leave bill could harm small furniture businesses]

See more:
Looking to grow your business? Look no further.
Becoming a member of the HFA has more benefits than we can list here. Click the button to learn more.
Trending In

HFA Solution Partners

Linnihan Foy logo

Linnihan Foy Advertising is 30-person, full-service marketing agency in Minneapolis, MN. We focus on retail

3D Cloud logo

Marxent makes it easier to buy and sell home furnishings online. From 3D sectional configurators

Katapult_HFA Partner Logo

Katapult: Your Omnichannel Growth Partner in Lease-to-Own Katapult helps furniture retailers tap into a high-intent,

Linnihan Foy logo

Linnihan Foy Advertising is 30-person, full-service marketing agency in Minneapolis, MN. We focus on retail

3D Cloud logo

Marxent makes it easier to buy and sell home furnishings online. From 3D sectional configurators

Katapult_HFA Partner Logo

Katapult: Your Omnichannel Growth Partner in Lease-to-Own Katapult helps furniture retailers tap into a high-intent,

Faire Logo

Faire is the world’s leading online wholesale marketplace, connecting independent retailers with unique, high-quality brands

Guardian Protection Products

Guardian Protection Products, an OnPoint Warranty brand, enables furniture retailers to increase average order value

Faire Logo

Faire is the world’s leading online wholesale marketplace, connecting independent retailers with unique, high-quality brands

Guardian Protection Products

Guardian Protection Products, an OnPoint Warranty brand, enables furniture retailers to increase average order value

Sign up for more!
From HFA events to the latest member news, get updates straight to your inbox.
Stay Informed and Up To Date
Subscribe now to elevate your store's success with expert tips and the latest trends delivered straight to your inbox.

Not an HFA member?

Don't miss out on all of our association benefits!