California Eases Strict Statutory Compliance in Face of COVID-19

Finding that “strict compliance with various statutes and regulations ... would prevent, hinder, or delay appropriate actions to prevent and mitigate the effects of the COVID-19 pandemic[,]” Gov. Newsom issued Executive Order N-40-20 (EO N-40-20). As it pertains to private businesses (and often equally to individuals), EO N-40-20 provides a significant amount relief, including but not limited to the following:

• All individuals and businesses filing a tax return for less than $1 million in tax may be granted an additional period, up to three months, to file their tax returns or request an extension. In practice, small businesses will likely have until the end of July to file their first-quarter returns.
• The statute of limitations to file a claim for refund of state taxes paid is extended by 60 days for both individuals and businesses.
• The deadline to file an administrative appeal with the Office of Tax Appeals (OTA) is extended by 60 days for both individuals and businesses.
• The deadlines for various annual fees, reporting requirements and administrative regulations unique to the gambling industry are extended by 60 days.
• The Department of Alcoholic Beverage Control may suspend deadlines for renewing licenses for up to 60 days.
• For any shareholder meetings that have already been scheduled, or must occur before June 30, 2020, certain existing shareholder voting and notice requirements are suspended, so long as specified conditions are met.
• The Department of Consumer Affairs may, for 60 days from the date of the order, waive any continuing education requirements for numerous businesses including, but not limited to: health care professionals and health care institutions; the healing arts; accountants; advertisers; architects; attorneys; professional fiduciaries; professional engineers; contractors; security services; and foreign labor contractors.

State and local governments and agencies are feverishly amending, augmenting and supplementing orders and directives in an effort to balance public safety and welfare against the potentially ruinous impact COVID-19 and its attendant restrictions may have on operative and economic viability in the business community.

In this ever-changing legal landscape, it is imperative that businesses remain apprised of relief available to soften the economic blow of COVID-19. For more information, please reach out to your regular Pillsbury contact or the authors of this Client Alert.

The authors thank Margaret Beale-Wirsing for her research assistance.

Pillsbury’s experienced crisis management professionals are closely monitoring the global threat of COVID-19, drawing on the firm’s capabilities in supply chain management, insurance law, cybersecurity, employment law, corporate law and other areas to provide critical guidance to clients in an urgent and quickly evolving situation. For more thought leadership on this rapidly developing topic, please visit our COVID-19 (Coronavirus) Resource Center.