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Lawmaker wants SBA, states to fix PPP tax issue for farmers
A Wisconsin Senator would like some farmer-friendly changes to the Paycheck Protection Program.
Democrat Tammy Baldwin says the treasury and the Small Business Administration should exclude Coronavirus Food Assistance Program, or CFAP payments from farm gross receipts when considering a second PPP loan in the next round. Baldwin tells Brownfield many farmers didn’t get the help they needed in round one. “A lot of the loans were based on net receipts the year before, and too many farmers had negative revenues, and so the loans that they were qualifying for were minuscule.”
Baldwin says she spoke with one farm couple that only qualified for an eighty-dollar PPP loan because of the round one guidelines.
Another problem in some states is the forgiven PPP loans are being counted as income for state taxes, which Baldwin says was not the intent of Congress. “For federal purposes, this should not be taxable but obviously the states do their own interpretation.”
For example, Wisconsin’s Department of Revenue website says federal and state law provides an exclusion from income for original round one forgiven Paycheck Protection Program loans, but taxpayers must count any subsequent PPP proceeds forgiven as gross income. Baldwin says she hopes Wisconsin’s Legislature clarifies the second-draw PPP state tax issue.
