DON’T TAX PPP LOANS!
Contact The Legislature! Tell Them Not To Tax PPP Loans!
In H.315, the legislature’s COVID-19 relief bill, the Legislature authorizes the state to tax as “income” any Paycheck Protection Program (PPP) relief money a business received from the federal government if the loan was forgiven in calendar year 2021. Yes, that’s right: any PPP loans forgiven in 2021 can be taxed by the state as business income.
While the state is currently drowning in federal relief money, it still wants to tax emergency relief money received by small businesses.
PPP loans were a survival lifeline to Vermont’s small businesses and their employees during the COVID-19 shutdown. Imagine the shock and insult this tax will be to thousands of business who got small PPP loans of perhaps a few tens of thousands of dollars and who may still be teetering on the edge of existence. Everyone understood that these loans were not taxable.
Governor Scott would not sign H.315, but could not veto the bill, either, because the PPP taxation provision was just one feature of the large, much-needed pandemic-relief funding bill. So he allowed the bill to become law without his signature. In his Statement on the bill, however, he forcefully denounced the Legislature’s decision to include taxation of PPP relief money in the bill.
Some good news is that, despite the passage of the bill, the Legislature can still decide, in separate legislation, not to impose the tax. Businesses are strongly urged to contact the Legislature and express their feelings against the taxation of PPP loans. Here’s how you can contact the Legislature: