Massachusetts business may face taxes on their forgiven PPP loan amounts if the state of Massachusetts does not act quickly. Due to the way Massachusetts conforms to the federal tax code, businesses that file as pass-through entities (LLCs, S-Corps, Partnerships etc.) will be taxed by the state on the forgiven loan amounts as it will be treated as taxable income. However, businesses that file as corporations will not be taxed by the state.
NFIB spoke out last fall about the need to remedy this situation as many small business owners sought PPP loans as a way to stay afloat during the state mandated shutdown. Businesses accepted the loans expecting full forgiveness as long as the adhered to the loan’s stipulations. It would be patently unfair to tax small businesses on those forgiven loan amounts.
In last session’s Senate version of the economic development bill, language was included to ensure the loans would not be taxed. Unfortunately, this language did not make it into the final bill.
Earlier this month, Senators Lesser, Lewis, and O’Connor refiled the language as Senate Docket No. 172 to attempt to right this wrong. Several dozen lawmakers signed on to co-sponsor this bill.
We urge you to contact your lawmakers using our Action Alert, asking them to support SD172 on behalf of small businesses: https://www.votervoice.net/NFIB/21/campaigns/79304/respond