Last week, the Marine Retailers Association of the Americas submitted letters signed by recreational boating and recreational vehicle (RV) industry organizations to 15 state legislatures urging them to come into conformity with federal tax guidance on forgiven Paycheck Protection Program (PPP) loans to ensure that small businesses would not face unnecessary, and unexpected, tax burdens.
Each letter outlines that:
The Consolidated Appropriations Act of 2021 (H.R. 133) — which was signed into law on December 28, 2020 — authorized a second round of PPP loans, and clarified the original intent of PPP loans as tax-free stimulus with the Internal Revenue Service to ensure that (1) forgivable PPP loans are not included as taxable income at the federal level; and (2) businesses can claim normal tax deductions for business expenses paid for with forgiven portions of PPP loans.
The letters also contain references to the amount of PPP loans were distributed in each state, as well as the economic impact of the outdoor recreation community on each state’s economy.
Absent legislative action to conform with federal tax guidance, forgiven PPP loans would be included as taxable income for small business owners, going against the very intent of the program.
Wisconsin and Pennsylvania have come into conformity with federal guidance on forgiven PPP loan taxability. Maine will not tax the first $1 million in a business’s forgiven PPP loan. MRAA put together a resource outlining what states were taxing forgiven PPP loans.
The letters that were submitted to each state’s legislative leadership can be accessed below.
1. Arkansas
2. Arizona
3. Florida
4. Idaho
6. Maine
7. Minnesota
9. Nevada
10. Pennsylvania
11. Texas
12. Utah
13. Virginia
14. Vermont
15. West Virginia
