Paycheck Protection Program Extended Two Monthsposted on 4.05.2021
- State Poised for PPP Franchise Tax Breaks
President Joe Biden last week signed a two-month Congressional extension of the Paycheck Protection Program, with the new deadline set for May 31. The extension resulted from changes the administration announced in February to help the smallest businesses in communities across the country.
Those changes included a 14-day priority application period for businesses with fewer than 20 employees, an updated loan calculation formula for sole proprietors and new eligibility rules.
Businesses that still need assistance are encouraged to apply soon as reports indicate that funding is dwindling and may be depleted well before the May 31 deadline.
State Lawmakers Move to Spare Franchise Taxpayers
Texas businesses that receive forgiveness for PPP loans won’t suffer a franchise tax hit for such receipts under legislation working its way through the Texas Capitol.
They’ll also be able to claim a franchise tax cost of goods sold deduction for eligible expenses paid with PPP loans or loans from the restaurant revitalization fund which was established in Biden’s American Rescue Plan signed into law last month.
HB 1195 by Rep. Charlie Geren, R-Fort Worth, passed the full House last week and was taken up in the Senate today where Sen. Kelly Hancock, R-Dallas, is carrying the measure.
Questions remain among lawmakers whether this measure would run afoul of provisions in the American Rescue Plan Act that prohibit state and local governments to use the disaster relief funds to reduce taxes, so stations are cautioned to not make any financial moves based on this legislation until those questions are resolved.
Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.
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