After the Maine retailer closes, Mills needs them to pay state taxes on their PPP loans

0
79
After the Maine store closes, Mills wants them to pay state taxes on their PPP loans

Governor Janet Mills plans to balance her bloated budget on the struggling small business owners by forcing them to pay $ 100 million in state income taxes on Paycheck Protection Program (PPP) loans. The public found out on Monday at a meeting of the Committee on Resources and Finance, at which the members discussed the supplementary budget and the administration’s tax compliance plan after a busy year with economic stimulus packages and tax changes by the federal government.

Maine Senator Susan Collins helped draft the Pandemic Paycheck Protection Program, which sent emergency funds to small businesses across the country to keep their employees on payroll. The program was designed to prevent unemployment from rising to epic proportions amidst all the stalemate and economic restrictions imposed by state governors, including Mills.

At the beginning of the pandemic, Congress passed the First Coronavirus Response Act for Families and the Coronavirus Aid, Relief and Economic Security Act, which changed federal tax law to exempt PPP loans from federal taxes. In December, Congress passed the Consolidated Funds Act, which in fact provided a second incentive by allowing cost deductions for expenses covered by PPP loans.

According to FederalPay.org, 28,270 Maine businesses received a total of $ 2.3 billion in PPP loan in 2020, with an average prize pool of $ 80,098. The governor’s proposal does not reflect federal law exempting these loans from state taxation or further relieving them through cost deductions.

When Republican committee members sounded the alarm in the face of the pandemic-related uncertainty about taxing Maine’s small businesses, Mills’ Budget Commissioner Kirsten Figueroa essentially wept over poverty.

“The federal government uses the tax code to offer recipients of PPP loans additional fiscal incentives for the federal government. With no additional resources for states to fund these efforts, this is a compliance requirement challenging state governments across the country. “

Essentially, Figueroa is saying the state needs those $ 100 million from small businesses because Congress failed to pass a law allowing states to use coronavirus aid funds to replenish lost revenue. Since Congress failed to intervene to save Maine for Mills’ irresponsible spending, the government is now enforcing the burden on the small business owners who struggled to make ends meet year-round as they tried to make their dizzying list more economical Comply with restrictions.

As noted by many groups that opposed the plan, such as the National Federation of Independent Business, the Maine Society of CPAs, Hospitality Maine, and the Maine State Chamber of Commerce, small businesses in Maine cannot afford a new federal income tax issued Loans.

“Without PPP and Maine’s recovery grants, half of our industry would be dead by 2021,” said Greg Dugal of Hospitality Maine. “In this devastating economic era, we all know for a fact that small businesses shouldn’t receive unexpected income tax bills of $ 1,000 or more based on a federal government bailout.”

To add insult to injury, Mills has already ordered Maine Revenue Services to draft forms to match their plan for the February 12 tax return. After nearly a year of single-handedly dictating public order in Maine, the governor acted unilaterally again without the input of the legislature. It’s worth noting that two Senate Democrats, Sens. Jim Dill and Cathy Breen, pioneered Cloture to legislate for federal tax compliance.

Mill’s tax compliance plan is grossly irresponsible. After government spending increased by $ 800 million in her first budget, the governor proposed her second biennial budget earlier this month, adding another $ 400 million to spending. Instead of tightening our belts to reflect the economic uncertainty caused by the pandemic, the governor continues to spend money we don’t have.

Now she wants small businesses to pay the bill for their poor decision to lock down the state and manage every interaction between a business and its customers. Maine doesn’t need that $ 100 million small business owner to balance its budget. What Maine needs is a governor who values ​​the people who create value for the rest of society.