Small Business Updates
There have been a few legislative developments that could impact your small business so we wanted to alert you about them. As always, reach out to us if you'd like to discuss these more. Also, we encourage you to reach out to your local representatives if you want you voice heard on any of these items.
PPP Update
The IRS recently issued a new ruling which has some bad news on the deductibility of expenses paid for with PPP loan proceeds. The detail ruling is attached but in a nutshell it says that any expenses paid for with PPP loan
funds that the taxpayer has a reasonable expectation to be forgiven (even if forgiveness will not be received until 2021/2022 or even if forgiveness is not applied for yet) will NOT be allowed as deductible business expenses on the 2020 tax return. We expect this topic to be debated more and hopefully overturned, but for now, this is the latest guidance we have.

We still feel it is a sound financial move to apply for forgiveness but at this time you will lose the tax benefit of those expenses forgiven. To determine this impact, multiply your marginal tax rate times the loan amount forgiven (i.e., a taxpayer with a $100,000 PPP loan expecting full forgiveness and a 22% marginal tax rate will pay $22,000 higher in taxes, all other things being equal, as a result of this change)
IRS_ American Money
Aerial Drone photograph of a sunset over the Colorado state capital building.  Capital city of Denver.  The Rocky Mountains can be seen on the horizon
Special Colorado Legislative session on Pandemic Relief
Governor Polis has called a special legislative session which began Nov 30th to discuss a number of potential pandemic relief efforts. Of interest to small business owners are programs that may provide grants and direct aid to help businesses impacted by safety and capacity restrictions put in place by the county they operate in. There is also potential legislation specific to restaurants that may allow a deferral of state sales tax collected on food until February. The session is expected to last at least three days - we will keep an eye on these and suggest you do as well in case any legislation passed will provide potential benefit to you and your small business.
Potential COVID lawsuit protection
The same legislative session noted above may also result in some COVID related lawsuit protection to small business owners. Under discussion is a potential bill that would provide immunity to small businesses with less than 50 employees who make good faith attempts to comply with all COVID related safe operating procedures. This legislation would protect these small businesses from potential lawsuits brought by customers and employees who felt they contracted coronavirus in the small business establishment. More to follow but something to keep an eye on.