Written by Gordon Webster, Jr.
It’s Paycheck Protection Program loan forgiveness time, where business owners, bankers and CPAs work to ensure relief loans turn into grants.
Business groups have one important concern about the program. Congress originally intended for expenses such as payroll, rent, mortgage interest and utilities to be considered deductible business expenses. But the Treasury Department intends to impose taxes on those expenses, taking the position that allowing deductions would constitute “double dipping” of tax forgiveness.
The Business Journal joins the National Newspaper Association, of which it is a member, in the Parity for Main Street Employers coalition. The coalition supports the Small Business Expense Protection Act (S. 3612), which would correct this “erroneous interpretation of tax policy by Treasury,” according to a new release from the National Newspaper Association.
The organization has written a letter to Congressional leaders stating:
“Congress intended for the loan forgiveness under PPP to be tax-free. (Treasury) reverses that position and eliminates any benefit, let alone a double benefit. If a business has $100,000 of PPP loans forgiven and excluded from its income, but then is required to add back $100,000 of denied business expenses, the result is the same as if the loan forgiveness was fully taxable.”