State Exempts Forgiven PPP Loans from Tax

posted on 5.24.2021

- Alcohol Set to Go, Legislature Set to Return

Texas broadcasters and other businesses whose Paycheck Protection Program loans from the federal government are forgiven will not have to report that funding as revenue for state franchise tax purposes. That exemption stems from a measure adopted by the Texas Legislature and signed into law by Governor Greg Abbott this month. 

      The legislation, HB 1195 and SB 372, enjoyed near unanimous support in both chambers and was widely supported by business advocacy groups, including TAB.

Another measure signed into law this month, HB 1024, allows restaurants to continue selling alcohol to go. The practice, which was permitted temporarily by Abbott during the COVID-induced lockdowns last year, proved popular with customers and so important to many dining establishments’ survival that lawmakers decided to make the practice permanent.

The bill includes several safety precautions for restaurateurs, but no restrictions on advertising.

Legislature to Reconvene
While state lawmakers will conclude their regular session next week, they are set to return in special session later this year, likely October, to rewrite electoral maps for the Legislature, State Board of Education and the state’s growing congressional delegation.

Redistricting, as the process is known, can be done during regular session, but delays in the 2020 Census forced the postponement, as they will the 2022 primary elections.

The special session will also give state lawmakers an opportunity to weigh in on how to spend nearly $16 billion the state is receiving under the federal American Rescue Plan Act advanced by President Joe Biden to help recover from the COVID-19 disaster.

That opportunity stems from last-minute budget wrangling in which House leaders succeeded in securing language to the state’s next two-year spending plan that dictates only the Legislature can appropriate those disaster relief funds.

The dust-up reflected House members’ frustrations – fanned in part by the new chairman of the state’s Republican party – with Abbott’s leadership style and pandemic restrictions in which lawmakers contend they were excluded from making substantive policy contributions.

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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