Minnesota State Senator Gary Dahms, of Redwood Falls, said he supports a new bill that would make COVID-relief grants for businesses non-taxable.
Dahms said, “These loans have proven critical to keeping our small businesses and their employees afloat during the pandemic. To make small businesses liable to pay taxes on the same support that has kept them alive just does not make sense.”
Senate File 263, introduced in the Minnesota Senate last week, is a federal conformity tax bill allowing loan forgiveness and allowable deductions of covered expenses from the Federal Paycheck Protection Program (PPP) to be excluded from state income and corporate franchise taxes. Additionally, the bill gives some businesses greater flexibility to file as C-corporations.
Without the bill, Minnesota companies may have to pay millions in taxes on PPP loan forgiveness that was meant to keep businesses alive. Thousands of Minnesota businesses received and will receive loan forgiveness through the PPP program.