Legislation designed to protect New Jersey businesses from additional tax complications after receiving funding under the Paycheck Protection Program (PPP) advanced through the Senate.
The bill, which had bipartisan support, would ensure any PPP loans that were forgiven by the federal government would be exempt under New Jersey’s gross income tax.
The proposed legislation, cosponsored by State Sens. Anthony M. Bucco (R-25) and Troy Singleton (D-7), would align with the federal government’s intent for the loans to be forgivable, and respect businesses that maintained employee payrolls even when there was little or nothing to do at work.
Protecting New Jersey’s Small Businesses
Singleton, who serves as the Chair of the Senate Community and Urban Affair Committee, argued too many small businesses across the Garden State were close to shutting down.
“Our small businesses have been pummeled over the past year, many of our favorite family establishments have already closed, and numerous others are at risk of shutting down,” he said when the bill passed the Senate Budget and Appropriations Committee.
The legislation would further protect those businesses that saw federall PPP loans as a lifeline in uncertain times.
“This would provide further relief to businesses around the Garden State,” he concluded.
Ensuring Use as PPP Intended
The PPP was established under the CARES Act, and would offer loans to keep employees on the payrolls of small businesses. Under certain conditions, the loans could be forgiven.
State Sen. Bucco noted these lifelines should not become a penalty to those who intended to help other New Jersey residents during a difficult time.
“During this extremely difficult time, small business owners should not have to worry about additional taxes,” argued Bucco.
“New Jersey is one of the highest taxed states in the nation,” Bucco added. “During this pandemic, when small businesses are literally struggling to survive, the last thing they need is yet another tax.”