Property tax relief announced as coronavirus hits California budgets

By: Hannah Wiley

Personal finance website WalletHub set out to find which states have the largest property tax load. WalletHub also mentioned what residents should keep in mind when it comes to meeting their tax obligations. It analyzed real-estate and vehicle property taxes.

California Gov. Gavin Newsom said Wednesday he has signed an executive order to waive the 10 percent penalty on late residential and small business property tax payments for those unable to pay on time due to the coronavirus emergency.

Property tax is paid twice a year. The second payment was supposed to be paid no later than April 10.

Newsom had previously cast doubt on whether any property tax relief would be provided, but said his administration had worked with county representatives and the California Board of Equalization to come up with a plan.

“I am pleased the governor has granted these extensions,” board member Ted Gaines said. “They will provide significant relief to the many homeowners and business owners who are having a difficult time meeting their financial obligations while following the governor’s stay-at-home order due to the COVID-19 pandemic.”

The waiver will “allow people with hardships to establish payment plans and not have to experience that penalty,” Newsom said.

“We think this is significant clarification,” he said. “We think this could be significant relief, particularly that timeline that extends into the new year.”

The waiver for personal residential property taxes will extend through next May. Businesses required to file annual property tax statements will have a month’s extension from the May 7 deadline, Newsom said.

Newsom said the 10 percent penalty could be particularly “strong” amid economic uncertainty caused by the coronavirus.

“Those property taxes are so large for people, and so challenging at this time, we wanted to provide this clarity. And the executive order will do just that,” Newsom said.

On another tax matter, the governor said he would keep a vaping tax proposal that he originally included in his January $222 billion proposal as he prepares a May revision.

The January budget included a $2 tax per 40 milligrams of nicotine, on top of existing taxes. The state projected to raise $32 million in 2020-2021 from the tax, used for enforcement, youth prevention and health programs.

Newsom had formerly signed an executive order in September to crack down on stores that sell vaping devices. That mandate requires those businesses to post health risk advisories and called on California’s tax collectors to advance enforcement of the vaping industry.

Lawmakers rejected last year a bill to criminalize the possession of vape products by underage consumers. A new proposal would ban all sales of flavored tobacco products in California.

“The vaping concern is still real, despite COVID-19,” Newsom said. “I think that deserves attention in terms of our budget submittal on May 14.”

Newsom’s executive orders are adding up, with another announced during his press conference to allow workers who contracted the coronavirus to file for workers’ compensation.

The order allows workers who contracted COVID-19 since March 19 to file a claim under the assumption they caught the virus on the job. Newsom said the order covers “all sectors of the economy,” and will expire in 60 days.

“This is a way of providing support to our critical workers,” Newsom said.

Workers have to prove they’ve tested positive for or were diagnosed by a physician with the virus, Newsom said. Employers can only rebut the claim under “strict criteria” and workers first have to exhaust state and federal relief benefits.

Newsom said this opportunity will help fill gaps left as federal and state sick leave was expanded. Paid sick leave was expanded federally to food businesses with more than 500 employees, but left out larger chains. The state filled that gap in the food industry, but other industries did not receive the benefits.

“It should provide some calm and relief to our health care workers who were otherwise scratching their heads wondering why they were not part of some of these original announcements,” Newsom said. “We want to keep workers healthy and keep them safe.”

The announcement follows increasing pressure from unions and labor group lobbyists representing front-line workers. Janitors, warehouse employees, first responders, nurses and farm laborers are among those included.

“Many firefighters have already become ill from on-the-job exposure to COVID-19 and the uncertainty of what happens next, weighs heavily,” said Brian K. Rice, president of California Professional Firefighters. “The executive order provides critical basic protections for these brave men and women should they become ill with COVID-19, due to their service to the public.”

Workers will have to prove they were reporting to work when they contracted the virus, said Victoria Hassid, chief deputy director of the California Department of Industrial Relations. Employers can also present evidence against an employee’s claim of infection.