NFIB testifies against it, saying it will raise costs for struggling small businesses
A Virginia House Committee has just voted in favor of a bill that would not allow businesses that took Paycheck Protection Program loans to write off loan-related expenses. That is not what the federal government chose to do recently when Congress voted to allow those deductions on federal income taxes. On a separate issue, the loan proceeds that were forgiven would still be tax-exempt both at the state and federal level.
NFIB testified before the Virginia House Finance committee on House Bill 1935 and said the deductions for PPP expenses should be allowed. At a time when many Virginia small business owners are struggling and even on the brink of closing their doors forever, the last thing Main Street needs is a surprise tax bill.
“This is a money grab from the pockets of suffering small businesses who lost so much revenue when they were closed by the government and through no fault of their own,” said NFIB’s Virginia State Director Nicole Riley in a recent new release. “The legislature just wants more money to spend but with this bill, that cost falls on the backs of small business owners.
“Small businesses took PPP loans when the government shutdown the economy and the goal was to save employee’s jobs and keep them off the unemployment rolls,” she added. “The business owners followed all the rules and carried out their end of the bargain. Essentially, the state is kicking them when they are down.”
Virginia must conform state tax policy to federal tax policy to ensure small businesses are not hit with additional state taxes, It will also make filing easier by streamlining the tax process.