Business-tax proposal could raise $1.1 billion

State legislators may suspend a business-tax deduction to pump an additional $1.1 billion into California’s coffers — a proposal that small businesses fear could hurt their bottom line.

Currently, businesses that lose money one year can take a tax deduction in the next year they turn a profit. Under the proposal from the Assembly Budget Committee, that deduction would be tabled for three years — but could be claimed in year four.

Although the proposal would affect all businesses in California, smaller firms say it will hit them the hardest.

Ninety-nine percent of businesses operating in San Francisco are small businesses with fewer than 100 employees, according to Al Dixon, director of the San Francisco Small Business Development Center.

bwinegarner@sfexaminer.com

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