FOR IMMEDIATE RELEASE:
January 25, 2021
Senate Bill Provides Substantial Relief for Minnesota Businesses
St. Paul, MN – Last week a bill was introduced in the Senate that will provide substantial relief to Minnesota businesses struggling during the COVID-19 pandemic. Senate File 263 is a federal conformity tax bill allowing loan forgiveness and allowable deductions of covered expenses from the Federal Paycheck Protection Program (PPP) to be excluded from state income and corporate franchise taxes. Additionally, the bill gives some businesses greater flexibility to file as C-corporations.
Without the bill, Minnesota companies may have to pay millions in taxes on PPP loan forgiveness that was meant to keep businesses alive. Thousands of Minnesota businesses received and will receive loan forgiveness through the PPP program.
“Our small businesses and their workers need our support,” said Senator Gary Dahms (R – Redwood Falls). “We cannot take our local rural businesses for granted. Many small businesses have already closed permanently, and many more will close if we do not act.”
The Paycheck Protection Program is a loan through the Federal Government’s Small Business Administration that helps businesses keep their workforce employed during the COVID-19 pandemic. The federal government is offering forgiveness to these loans if businesses maintain employee compensation levels along with spending at least 60% of the proceeds on payroll costs.
“These loans have proven critical to keeping our small businesses and their employees afloat during the pandemic,” Dahms continued. “To make small businesses liable to pay taxes on the same support that has kept them alive just does not make sense.”
Senator Dahms is in his fourth term representing Senate District 16 which includes communities in Brown, Lac qui Parle, Lyon, Redwood, Renville, and Yellow Medicine counties. He also serves as chair of the Senate Commerce and Consumer Protection Finance and Policy Committee and Vice Chair of the Agriculture and Rural Development Finance and Policy Committee.
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