Chamber: do not tax PPP loans
BOSTON (SHNS) – Greater Boston Chamber of Commerce chief Jim Rooney calls on lawmakers to work quickly on a bill that would update state rules so that businesses aren’t taxed for them. paycheck protection program repayable loans.
The law project, SD 172 filed by Sen. Eric Lesser, would align the state’s tax code with a provision in last year’s CARES Act that exempts canceled PPP loans from federal income tax, Rooney said.
If lawmakers don’t make the change, businesses that pay state personal income tax would have to include the amount of their canceled PPP loans in their gross income for state tax purposes.
“It is clearly not the intention of the program to tax these loans because Congress has taken two rare measures regarding P3s: canceling loans if the payroll and membership are maintained and exempting them from abandoned federal income tax loans, “Rooney said in letter to legislators. “These measures were taken because the goal of the program is to maintain jobs and business activity. By subjecting the canceled loans to tax, the state would undermine these objectives. ”
Rooney said the problem only affected companies with a particular legal structure, the one most common with freelancers, sole proprietors, and flow-through entities. The bill has not yet gone to committee, in part because the House and Senate have not yet organized into committee.
Rooney said he understood the state was facing an uncertain revenue picture, but told lawmakers that forgoing tax revenue on canceled PPP loans “would provide much-needed relief to small businesses” and keep many between them afloat.