Senate passes Singleton bill to protect small businesses that have received P3 loans

Trenton – In an effort to protect small businesses from additional taxes on their federal P3s loans, the Senate today passed legislation, sponsored by Sen. Troy Singleton, that would ensure that canceled loans are not subject to income tax. New Jersey gross income.

“Our small businesses have been bludgeoned over the past year, many of our favorite family establishments have already closed, and many more are at risk of closing,” said Senator Singleton (D-Burlington), Speaker of the Senate, Community and urban affairs. Committee. “For many, federal P3 loans were a boon that helped them stay open. New Jersey should follow the lead of the federal government and allow businesses to deduct canceled loans from state taxes. This would bring further relief to Garden State businesses. “

The Bill, S-3234, would ensure that canceled Payment Protection Program loans would not be subject to state income tax and would also allow the deduction of expenses paid by a Protection Program loan. paychecks even if the loan is canceled.

Under the CARES Law, Congress clearly wanted recipients of canceled P3 loans to be able to deduct expenses, which lawmakers recently claimed. Many loan recipients kept their employees on their payroll, even when there was little or no work to be done, in line with the program’s intention to keep people employed and out of unemployment.

As part of the federal program, the U.S. Small Business Administration approved approximately $ 525 billion in small business loans, of which $ 17 billion went to New Jersey businesses, to cover salary expenses and other non-wage costs, such as mortgage interest and utility costs. . To encourage loan recipients to retain existing staff, the program allowed loans to be canceled if the borrower met certain payroll and job retention criteria.

The bill was released from the Senate by a 33-0 vote.

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