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07/27/2021 02:51 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20210&cosponId=34253
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House of Representatives
Session of 2021 - 2022 Regular Session

MEMORANDUM

Posted: January 19, 2021 03:53 PM
From: Representative George Dunbar
To: All House members
Subject: Exempting Paycheck Protection Loans from State Income Tax
 
In the near future, I plan to reintroduce legislation that will exempt a forgiveness of indebtedness granted under the Paycheck Protection Program from state Personal Income Tax (“PIT”).  

Established under the Coronavirus Aid, Relief and Economic Security Act, the Paycheck Protection Program has been a lifeline for small businesses across the Commonwealth by providing financial tools to help maintain operations during these truly unprecedented times. If proceeds of a loan issued under the program are used by a business to cover payroll costs, payments of interest on mortgage and rent obligations, and utility payments, the business may have the amount forgiven from federal taxation. Given our rolling conformity with the federal tax law, Pennsylvania taxpayers subject to our state Corporate Net Income Tax (“CNIT”) will similarly have the amount excluded from their state tax liabilities; unfortunately, however, the same does not hold true for our small businesses without an act of the General Assembly. 

My legislation, which provides the necessary exemption, will further build upon the benefits provided by the Paycheck Protection Program and ensure that consistency, and a level playing field, is provided for our small businesses. By exempting the forgiven amounts from state tax, small business owners, in particular, will be able preserve the total amount of funds forgiven for use in not only keeping their businesses open, but more importantly, retaining their employees and supporting our local communities.  

I respectfully ask for your consideration in cosponsoring. 

Prior Co-Sponsors: Peifer, Greiner and Ryan  
 
 



Introduced as HB385