Senate Advances Bill To Exempt Canceled P3 Loans From New Jersey Gross Income Tax | New Jersey
(The Center Square) – The State Senate has approved a bill to exempt federally canceled Paycheck Protection Program (PPP) loans from New Jersey gross income tax .
The Senate voted 33-0 to pass the bill, S-3234. The State Assembly will then consider the measure.
Congress created Coronavirus Aid, Relief, and Economic Security (CARES) loans to help small businesses keep their employees on their payrolls during the pandemic. The federal government can cancel some or all of the loans for recipients who meet certain conditions.
âAs we all know, the COVID-19 pandemic has devastated the New Jersey small business community. I can name dozens of family restaurants, small retail stores and other establishments that have closed forever or are in trouble [every day] to stay open, âSenator Anthony Bucco, R-Boonton, said in a press release.
âDuring this extremely difficult time, small business owners shouldn’t have to worry about additional taxes,â Bucco added. This “legislation will eliminate state taxes and prevent the state from profiting from the backs of businesses that continue to struggle during the pandemic.”
The Small Business Administration (SBA) has approved approximately $ 17.3 billion in P3 loans for small businesses in New Jersey. The Legislative Services Office could not determine how much revenue the state could lose if the proposed legislation becomes law.
Last year, 157,405 New Jersey businesses received PPP loans. Of these, 135,467 were loans under $ 150,000, according to the National Federation of Independent Businesses (NFIB).
âWhen small business owners took out these loans last spring to survive when they were ordered to shut down, and the owners agreed to keep their employees working and out of unemployment to turn them into grants, they didn’t ‘never imagined they would be imposed by the government,’ NFIB Director for the State of New Jersey Eileen Kean said in a press release.
“We are very grateful to the senators for following Congress and not imposing taxes on remittance funds and allowing loan expenses to be deducted,” Kean added. “We hope the Assembly will support New Jersey small businesses by doing the same.”
Under the bill, businesses could also deduct expenses paid by such a loan.
âNew Jersey is one of the highest taxed states in the country,â added Bucco. âDuring this pandemic, when small businesses are literally struggling to survive, the last thing they need is another tax. “