Senate bill would keep PPP money from being taxed

CONCORD - Small businesses who received Paycheck Protection Program loan forgiveness will want to keep a close eye on SB3, according to a recent bulletin from the state's Business and Industry Association.

Under current New Hampshire law if the loans were forgiven they are considered grants and taxable under New Hampshire's business profits tax. This was also an issue at the federal level but was quickly addressed and fixed in the most recent Coronavirus stimulus act passed in late December. SB 3 provides the same fix at the state level but comes at a cost which could exceed $100 million dollars. BIA is supporting the legislation and believes that this money, needed to keep people employed by small businesses hardest hit by the pandemic, was never meant to be taxed in the first place. Taxing these businesses in this way could wind up being the final nail in the coffin of companies struggling to stay open, BIA officials contend.

The bill is currently in the Senate Ways and Means committee.