NFIB State Director Gregg Thompson says small business owners stand to lose millions of dollars unless the General Assembly votes to let them deduct forgiven expenses paid for with federal Paycheck Protection Program (PPP) loans on their state income taxes.
“Small business owners can deduct these expenses on their federal income taxes, but they can’t deduct them on their state taxes, and that’s not fair,” Thompson said.
In the state Senate, SB104 would change North Carolina’s tax code so employers can deduct those COVID-19-related expenses. However, some members of the House want to pass legislation that would do just the opposite and prohibit employers from deducting those expenses on their North Carolina taxes.
“Our members understand that the pandemic has really had an impact on the state’s economy, and that’s put a dent in tax collections, but taxing the federal loans that allowed small businesses to avoid closing and throwing people out of work isn’t the solution,” Thompson said.
“Small businesses are especially vulnerable right now,” Thompson said. “That’s why our members are asking their legislators to vote ‘yes’ when it comes to deducting costs associated with staying open and keeping people employed during these difficult times.”
“Letting small businesses deduct PPP forgiven expenses on their state taxes would ease some of the financial pressure on these businesses and help them survive this ordeal,” Thompson said.