As tax deadlines loom, lawmakers announce deal that would exempt Massachusetts businesses from PPP loan tax
Lawmakers said they have reached an agreement to slash tax bills for businesses that received state and federal relief payouts amid the pandemic, and also aid some jobless workers, but they will have to act fast as tax deadlines loom.
Senate President Karen Spilka, House Speaker Ronald Mariano and Ways and Means Committee Chairs Rep. Aaron Michlewitz and Sen. Michael Rodrigues in a joint statement said the bill would “jumpstart” the pandemic recovery.
In an outline of the yet-to-be-released bill, lawmakers said they would exempt businesses from taxes on forgiven Paycheck Protection Program loans, freeze unemployment rates to two years, waive fees and certain taxes for some jobless workers and extend paid leave benefits.
The announcement came just hours after a group of bipartisan lawmakers and the Massachusetts Fiscal Alliance met to raise the pressure on legislative leaders to take action to help businesses on the hook for millions in taxes from PPP loans.
As lawmakers laid out in their statement, “time is of the essence” as tax bills for thousands of Massachusetts small businesses come due in less than a week on March 15. Massachusetts small businesses organized as pass-through entities owe an estimated $130 million on federal PPP loans, according to state budget chief Michael Heffernan.
In an effort to help businesses “stay afloat and save jobs,” lawmakers said the bill would waive taxes on the loans forgiven by the federal government.
Lawmakers promised to “act expeditiously” but offered no specific timeline.
“There has to be a significant sense of urgency,” Rep. David DeCoste, R-Norwell, told the Herald.
The outline of the deal provided by lawmakers notes the bill would give tax relief to jobless workers with income below 200% of the poverty line, or $53,000 for a household of four. It reportedly waives penalties for missed tax payments for people receiving unemployment benefits. It would ensure paid leave for workers with COVID-19, who are in quarantine following exposure or who must miss work to get vaccinated, and provides a mechanism to reimburse employers.
The bill would also freeze the unemployment insurance rate schedule through 2022 — another tax on employers that was slated to jump in April as the state continues to draw on its unemployment account now more than $4 billion in arrears.
Gov. Charlie Baker has filed a separate bill that would pause UI rate increases and allow for up to $7 billion in borrowing to repay federal loans. The governor last week also signaled his support for waiving taxes on pandemic relief for businesses.
Senate Majority Leader Bruce Tarr during a Monday press conference said lawmakers should be “leaving no stone unturned” to aid the state’s hard-hit small businesses in their continued survival.
State Treasurer Deborah Goldberg last week reported 13% of state business licenses including manufacturers, wholesalers and shipping companies have not been renewed. Up to 5% of restaurant and hotel licenses have not renewed, “a much lower number than we originally thought,” she said.
from Boston Herald https://ift.tt/3kYe7oP
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