Business groups applaud COVID-19 loan tax relief in Virginia
(The Center Square) – Business groups are applauding Virginia Gov. Ralph Northam for signing legislation that will grant tax relief on expenses paid for with COVID-19-related loans from the federal government.
The legislation allows up to $100,000 in business expense deductions from money obtained through the Paycheck Protection Program loans and Rebuild Virginia grants. These loans and grants were designed to help businesses maintain their payroll during revenue losses caused by the COVID-19 pandemic and subsequent economic restrictions.
Businesses will save about $100 million in taxes with this legislation.
“This legislation is a big win for small business owners,” Nicole Riley, the Virginia State Director of the National Association for Independent Business said in a statement.
“Many of our small business owners who took out Paycheck Protection Program or Rebuild Virginia loans are still struggling to recover from the COVID-19 pandemic,” Riley said. “They shouldn’t have to pay state taxes on money they used to pay their employees and keep their doors open. This legislation was the right thing to do – it will help keep our small business owners focused on what they do best: creating jobs that keep Virginia’s economy running.”
When budget and tax conformity talks began, Northam initially encouraged lawmakers to not include the business tax exemption. The House proposed budget would have included a smaller exemption, but after a push from the Senate, lawmakers agreed to the $100,000 deduction in the compromise legislation.
The legislation partially conforms the state tax code with the federal code. The federal government made these loans fully deductible at the federal level. Although state lawmakers usually conform the tax code in its entirety, Democratic lawmakers said the unexpected revenue losses caused by the COVID-19 pandemic made full conformity impractical.
Disclaimer: This content is distributed by The Center Square
