Singleton Bill: Forgiven PPP Loans Would Not Be Taxed By State
State Sen. Troy Singleton said small businesses fortunate enough to have their vital Paycheck Protection Program loans forgiven should not have those loans by subject to the New Jersey gross income tax.
“Our small businesses have been pummeled over the past year, many of our favorite family establishments have already closed and numerous others are at risk of shutting down,” Singleton (D-Moorestown) said. “For many, the federal PPP loans were a godsend that helped them stay open. New Jersey should follow the federal government’s lead and allow businesses to deduct forgiven loans from state taxes. This would provide further relief to businesses around the Garden State.”
His bill, S3234, which would ensure that forgiven Payment Protection Program loans would not be subject to the state’s income tax and also would allow for the deduction of expenses paid for by a PPP loan even if the loan is forgiven, advanced through the Senate Budget and Appropriations Committee, 12-0, last week.
Under the CARES Act, it appears Congress clearly intended for recipients of forgiven PPP loans to be able to deduct the expenses, which lawmakers recently affirmed. Many loan recipients retained employees on their payrolls, even when there was little to no work to perform, in compliance with the intent of the program to keep people employed and off the unemployment rolls.
Under the federal program, the U.S. Small Business Administration approved approximately $525 billion in loans for small businesses, $17 billion of which were given to New Jersey businesses, to support payroll expenses and other nonpayroll costs, such as mortgage interest and utility costs.
To incentivize loan recipients to maintain existing staff, the program allowed loans to be forgiven if the borrower met certain payroll and employment retention criteria.
Other notes from the weekend:
The state reported 4,613 new positive PCR tests Sunday, raising that total to 595,002. It also reported 851 new positive antigen tests, bringing that total to 67,806.
The PCR test generally is considered the gold standard of tests, and generally requires a 2-3 day turnaround. The antigen test often is referred to as the “rapid test,” and can have results in as little as 15 minutes.
The state also reported 17 additional fatalities, raising that total to 18,830, with an additional 2,121 deemed likely to be COVID-19 deaths.
State Sen. Vin Gopal (D-Ocean Twp.) on a bill he is cosponsoring that would allow for a regional reopening:
“While New Jersey has been hit hard by the pandemic, each part of the state has been affected differently and at different times. This has made it especially difficult considering closures and reopenings, since closures are determined on a statewide level — counties that may have few COVID-19 cases are being hit with the same restrictions as those areas being inundated with cases. By giving control to our county leaders, New Jersey counties can implement plans that are best suited for them at any given time.”