WASHINGTON, D.C. — Today, Congresswoman Michelle Fischbach (MN-07), Congressman Tom Emmer (MN-06), Congressman Jim Hagedorn (MN-01), and Congressman Pete Stauber (MN-08) wrote a letter urging Governor Tim Walz to extend tax forgiveness to small business Paycheck Protection Program (PPP) loans.
"The Paycheck Protection Program has been a godsend for thousands of businesses – small and large – across Minnesota’s Seventh District. We must continue supporting these job creators as they navigate the prolonged effects of this pandemic. Many of these businesses have long been valuable assets to our communities and local economies. I join my colleagues in urging Governor Walz and the Minnesota Legislature to help support these businesses by exempting forgiven PPP loans from state income taxes,” said Fischbach.
"I was proud to support the Paycheck Protection Program and have seen firsthand how this funding has served as a lifeline for businesses across Minnesota as they support their employees and communities. By keeping millions of Americans employed, our economy will recover much faster and our communities will remain strong. Most states across the nation have already acted to ensure forgiven PPP loans would not be taxed, but Minnesota has failed to do so. As Congressional leaders for Minnesota, we urge Governor Walz to rectify the impact of his government-mandated shutdowns and help our small businesses as they rebuild and rebound our economy," said Emmer.
"Small business owners have been especially punished by Governor Walz’s arbitrary lockdowns and restrictions that closed ‘mom and pop’ enterprises while big box stores, many with thousands of daily customers, remained open and thrived. Taxing forgiven PPP loans is a prime example of the kind of bad government policies that encourage entrepreneurs to relocate businesses to states like Iowa and South Dakota," said Hagedorn.
“This past year, elected officials like Governor Walz unilaterally implemented economic shutdowns which threatened countless small businesses, forced many to close their doors forever, and devastated hardworking families. Fortunately, Congress was able to implement the Paycheck Protection Program and offer many of these businesses a much-needed lifeline. Minnesota’s businesses required these PPP loans through no fault of their own, and it is unacceptable for the Governor to punish them again by taxing this much needed relief. That’s why I am proud to join my Republican colleagues in calling on the Governor to correct this situation by mandating that forgiven PPP loans be tax exempt," said Stauber.
The passage of the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) of 2021 affirmed that forgiven PPP loans are not considered taxable income and will therefore be tax-exempt. Minnesota's Republican Congressional Delegation supported this initiative at the federal level, and tax conformity is necessary at the state level.
More than 100,000 businesses in Minnesota received PPP loans to continue serving their communities and keeping their employees on the payroll over the past year. The state of Minnesota has a projected $1.6 billion budget surplus which makes the taxation of these loans burdensome and unnecessary.
Minnesota is one of only 11 states nationwide that tax forgiven PPP loans. The Minnesota Senate took bipartisan action by adopting PPP tax conformity legislation in March by a vote of 55-12. This legislation has yet to be taken under consideration by the Minnesota House of Representatives.
Read the letter here.
Michelle Fischbach is a wife, mom, grandma, attorney, and the U.S. Representative for Minnesota’s Seventh Congressional District. Get updates from Rep. Fischbach’s congressional office on Facebook, Twitter, and Instagram.