ACTION ALERT - PPP LOAN TAX CONFORMITY

Legislative leaders and Governor Walz tentatively agreed to include federal tax conformity as part of the budget deal.

The Legislature must now include PPP in final budget language otherwise PPP loans will be taxed.

Contact your state legislatures - urge them to support
​federal tax conformity for forgiven PPP loans.

Find my State Senator or State Representative

How Payroll Protection Plan tax law impacts you

The drastic effects on businesses from COVID-19 are well known. Every day another business closes its doors. While federal dollars helped some businesses weather the storm, Congress recognized that this emergency funding should not be taxable — and made sure that it would not be at the federal level, but not under Minnesota tax law:  

Forgivable PPP loans are taxable at the state level.  

Many employers used PPP funding to keep employees on payroll and withstand the economic downturn caused by the COVID-19 pandemic. Providing state tax conformity to forgiven PPP loans, is another tool the Legislature can implement to help our employers and job creators continue to keep their businesses open and employees on the payroll.  
 
Legislative leaders and Governor Walz have agreed (in principle) to enact full federal tax conformity on forgiven PPP loans. We strongly encourage the Legislature to include this agreement in the final budget package. ​

Please contact your legislator! Urge them to support federal tax conformity for forgiven PPP loans.
 

What people are saying about SF263

To say that these loans have been a life-line during this time of uncertainty and extreme business disruption would be an understatement of great proportions…We compete against like-sized companies that are incorporated in states that border Minnesota, but that do business and directly compete against us in the Minnesota market place.  If Minnesota were to move forward with this tax penalty, it would put Anchor Paper at a competitive disadvantage, making us less competitive in our home state.”

          Brooke Lee, CEO,
​          Anchor Paper Company

There's no reason not to do this with the surplus that we have…These are the businesses that struggled, these are the businesses that kept their employees and now we want to help them by conforming." 
​
          Senate Majority Leader Paul Gazelka,
          R- East Gull Lake 

Both my husband and I are small business owners living in St. Paul and we support this type of conformance with federal tax law. Not conforming to federal tax laws will place another burden on Minnesota small businesses at a time when many of them are already trying to weather this pandemic-related economic storm” 
           
​          Jennifer Bagdade, Principal,
​          PR UNSPUN 

Our business is still losing money – so paying taxes when the Federal government has made PPP non-taxable is frustrating. Minnesota does NOT automatically conform to federal tax law changes. State legislation is needed to ensure the forgivable loans are not taxed in Minnesota…Adding a tax bill from the state isn’t good for us, or other businesses that are just trying to survive.”
​
          Stephanie Shimp, Owner,
​          Blue Plate Restaurant Group​

For Minnesota to not act and then provide an over 9% tax on these forgiven loans would be unconscionable.”  
​
          Sen. Carla Nelson, R-Rochester,
​          chair of the Senate Taxes Committee ​

Because, and only because, we were able to obtain a PPP loan, we have been able to keep all of our staff employed. We used 100% of the funds for payroll...If we have to pay taxes on the PPP our employees will be directly impacted...Taxing money that small business owners took in good faith to keep Minnesota citizens employed would be a short sighted influx of cash into the state’s coffers, where we already have a surplus. We, as small business owners, do not have the same surplus and won’t be able to continue to maintain the same staffing levels if subjected to this additional tax." 
 
          Angela Maurer-Green, Owner,
​          Cedarberg Industries 

If you have any questions, please contact:

John Perlich
Manager of Public Affairs
Direct: 651.265.2778  |   Email