Senators Loeffler, Braun, Hoeven, Murkowski Introduce Legislation to Protect Small Businesses from Tax Liability for PPP Loans
Thursday, May 7th, 2020
U.S. Senator Kelly Loeffler (R-Ga.) joined U.S. Senators Mike Braun (R-Ind.), John Hoeven (R-N.D.) and Lisa Murkowski (R-Alaska) in introducing the Safeguarding Small Business Act to remove all tax liability associated with loan forgiveness under the Paycheck Protection Program (PPP).
Last week, the IRS issued guidance (Notice 2020-32) that any expenses covered by forgivable portions of a PPP loan will not be considered a business deduction, effectively levying an unforeseen tax on small businesses, completely contrary to the original intent of the Coronavirus Aid, Recovery and Economic Stability (CARES) Act.
“Small businesses are the lifeblood of our economy and have been hard hit by this pandemic,” said Loeffler. “Without our legislative fix, the government is effectively taxing the very businesses we have been advocating for in their critical time of need. Small businesses and their employees need Congress to provide relief and stability during these uncertain times, not taxes and red tape.”
“The CARES Act was intended as a lifeline to small businesses, but forcing them to shoulder tax liability for these forgivable loans would be like throwing them a cinder block,” said Braun. “I urge my colleagues to quickly pass the Safeguarding Small Business Act to protect the lifeblood of our economy from eating this unintended expense when they need relief most.”
“We need to do all we can to help our nation’s small businesses weather this public health emergency,” said Hoeven. “Our legislation would ensure that the IRS is able to administer the Paycheck Protection Program as Congress intended by making small businesses expenses covered by the PPP deductible. This will ensure that our small businesses are able to keep more of their cash to help them recover from this pandemic.”
“As a part of the CARES Act, the Paycheck Protection Program or PPP was put in place to help keep small businesses that have been impacted by COVID-19 afloat. Our local, mom-and-pop shops make up a huge percentage of Alaska’s businesses, and ultimately, our economy. We must do all we can to give our small businesses whatever help we can to make sure they are able to keep their workers employed and their doors open,” said Murkowski. “Passing this legislation will help ensure Alaska’s small business owners are protected under the PPP as intended, giving them much-needed support to overcome the impacts of this pandemic. We must not give to communities with one hand and take back with the other, right now.”