ST. PAUL – District 22B Rep. Rod Hamilton (R-Mountain Lake) said Thursday that a large number of local business owners were concerned about huge tax burdens this year due to accepting Paycheck Protection Program (PPP) loans.
Hamilton noted that on March 15, Minnesota House Republicans tried to allay those fears by trying to pass laws that would exempt PPP loan receipts from state taxes. Unfortunately, the majority of the Minnesota House refused to allow a legislative debate because all House Democrats opposed the move.
“We now have a situation where some of our neighbors are being forced to pay tens of thousands of dollars to take a loan,” said Hamilton. “The federal government does not tax this business loan as income. A bipartisan majority in the Minnesota Senate does not want to charge this loan as income. But not a member of the Minnesota House majority voted in favor of this sensible provision, adding even more headache to troubled business owners. “
Hamilton said many local business owners accepted the federal loan as a lifeline when Governor Tim Walz forced them to close at the start of the coronavirus pandemic last year. Many of them are still working under restrictions based on instructions from the governor.
Affected entrepreneurs who accepted PPP loans had to use these funds for business expenses such as wages or renting employees, which is why Congress ultimately granted the loans and exempted them from federal taxation. The Minnesota Senate recently passed the proposal for state PPP tax relief with 55-12 votes.
“With a $ 1.6 billion surplus, there is literally no need to force local business owners on the verge of permanent closure to pay thousands of dollars in state taxes on a loan made,” concluded Hamilton .