House Speaker K. Joseph Shekarchi, President of the Senate President Dominick J. Ruggerio and Governor Dan McKee announced that the budget to be considered tonight by the House Finance Committee will include a higher threshold on the taxation of Paycheck Protection Program (PPP) loans.
Under the budget presented to the House by Governor McKee, companies that profited from loans in excess of $150,000 were subject to state taxation. After a collaborative effort by Speaker Shekarchi, President Ruggerio and Governor McKee, the budget to be considered tonight by the House Finance Committee raises the threshold to $250,000. Approximately $2.6 billion in PPP loans were issued in Rhode Island. Ninety-three percent of loan recipients will not be taxed.
“PPP loans were a lifeline during the pandemic for many businesses. However, some recipients accepted PPP loans and then profited from them,” said Speaker Shekarchi. “Governor McKee, Senate President Ruggiero and I agreed to amend the threshold for loans to be taxed to $250,000. Only businesses that profited from the loans will be taxed. Of the approximately 30,000 Rhode Island businesses receiving PPP loans, this may impact only 2,000 businesses.”
“I was pleased to work collaboratively with Governor McKee and Speaker Shekarchi to refine the PPP proposal so that even fewer businesses are impacted,” said President Ruggerio. “The taxpayer funded, forgivable PPP loan program helped many businesses stay afloat during very difficult times. The revised budget proposal would only apply to PPP awards over $250,000, and even then only when a business showed a profit.”
“The PPP program provided a lifeline to businesses large and small during the COVID-19 pandemic,” said Governor McKee. “While my Administration’s original proposal gave significant tax relief to thousands of Rhode Island small businesses that received these funds, I am pleased that, because of the projected budget surplus, we will be able to extend that tax relief to even more businesses across the state. I thank the Speaker and Senate President for their collaboration and partnership on this effort.”
Like Newport Buzz? We depend on the generosity of readers like you who support us, to help with our mission to keep you informed and entertained with local, independent news and content. We truly appreciate your trust and support!