ST. PAUL, MN — State Representative Rod Hamilton (R-Mountain Lake) said a large number of local business owners are concerned about huge tax bills this year due to their acceptance of Paycheck Protection Program (PPP) loans.
Hamilton noted that Minnesota House Republicans tried to ease those fears on March 15, by attempting to approve legislation that would exempt forgiven PPP loan income from state taxes. Unfortunately, the Minnesota House majority refused to allow the bill to receive a floor debate, as all House Democrats opposed the measure.
“We now have a situation where some of our neighbors are forced to pay tens of thousands of dollars for accepting a loan,” Hamilton said. “The federal government is not taxing this business loan as income. A bipartisan majority in the Minnesota Senate do not want to charge this loan as income. But not one member of the Minnesota House majority voted in favor of this common-sense provision, and in doing so has given already struggling business owners even more headaches.”
Hamilton said many local business owners accepted the federal loan as a lifeline when Governor Walz forced them into closure last year at the beginning of the coronavirus pandemic. Many of them are still operating under restrictions due to the governor’s orders.
Impacted business owners who accepted PPP loans had to use those funds for business expenses, such as employee wages or rent, which is why Congress ultimately forgave the loans and made them free from federal taxation. The Minnesota Senate recently approved the state PPP Tax relief proposal by a vote of 55 -12.
“With a $1.6 billion surplus, there is literally no reason to force local business owners who were on the brink of permanent closure to pay thousands of dollars in state taxes on a forgiven loan,” Hamilton concluded.