Minnesota lawmakers are pushing for paycheck protection program loans to be exempt from state taxes.
Rep. Greg Davids, R-Preston, Republican House Tax Committee official on Monday sent a letter to the chairman of the committee, Rep. Paul Marquart, DFL-Dilworth, demanding action on a bill that would exempt PPP loans from state taxes.
Davids cited a surplus of $ 1.6 billion projected Friday for the state’s two-year budget cycle, marking a turnaround from a forecast deficit of $ 1.3 billion in November.
“In light of the government’s $ 1.6 billion budget surplus, we have the resources to address this issue quickly. Further delays will force companies to file extensions pending action by the legislature, ”the letter said.
In late 2020, Congress passed the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, which exempted PPP loans that meet specified criteria from federal tax.
Yet a handful of states, including Minnesota, have yet to exempt loans from state taxes.
Gov. Tim Walz said he was prepared to exempt PPP loans from state taxes at a press conference last week, ahead of the state’s budget surplus announcement. Walz said he would know more after the budget forecast.
“I am more than willing to have this conversion,” Walz said. “It is not meant to punish the very businesses it has helped.”
As of June, just over 98,000 Minnesota businesses had received more than $ 11.2 billion in PPP loans, according to the U.S. Small Business Administration.
Last month, the Biden administration announced that small businesses and nonprofits with fewer than 20 employees and sole proprietors could apply for a second round of PPP loans until March 9, after complaints that too much much of the first round of loans went to large corporations.
PPP loan applications will be open from March 10 to 31 for all other eligible entities.