Today, NFIB, or the National Federation of Independent Business, Iowa’s leading small business organization, is thanking the Iowa Senate for passing important legislation that would allow all small business owners to deduct their forgivable loan proceeds under the Paycheck Protection Program and would make these government loans tax-exempt at the state level. Yesterday, the Senate passed SF364 with a vote of 49-0. The federal government has already done this for small business owners. Small business owners here in Iowa are speaking out about the issue:
Jerry Akers, pictured at the top of this article, owns 17 Great Clips salons in Cedar Rapids, and while he is thankful for and says the Paycheck Protection Program loans have been vital to keeping his doors open, he’s still reeling from the pandemic. “Many businesses are still operating at 60% of normal revenue and doing their best to keep the doors open and people employed. The federal government has helped us to keep our employee’s employed, paid, and covered by benefits through the PPP and other stimulus packages so now it’s time for Iowa to recognize the negative impact of taxation on these much-needed funds that are the virtual lifeblood of small business for the foreseeable future and eliminate taxes on these funds so more of them can go to my employees, who dramatically need them right now,” said Akers.
In Pella, Tiffany Van Zante is the third generation small business owner of five family small business, including G.I. Warehouse, a trucking company in Pella that was hit hard by pandemic in terms of shortage of supplies to ship out and relied heavily on PPP loans. “In 2020, we received a PPP loan to support our payroll during the Covid-19 restrictions. Since then, we were thankful to learn that our loan had been forgiven, however, we are anxious for the final ruling regarding deductibility in the state of Iowa. If deductibility is not allowed, it will create additional hardship for many businesses that are already struggling to stay afloat. This additional financial burden could be the final blow to businesses that are already struggling to survive,” said Van Zante.
“The federal government has already forgiven the taxes on PPP loans that many of our small business owners here in Iowa took advantage of to keep their small businesses running during this unprecedented pandemic,” said Matt Everson, NFIB State Director in Iowa, “COVID-19 has closed the doors of many small businesses here in Iowa and left many others in peril. We applaud the Senate for quickly and in a bipartisan manner passing PPP tax legislation that will help our small businesses who were not yet tax exempt in Iowa on their forgivable PPP loans. We now urge the House to immediately take up and pass SF 364 and send to the Governors desk for her signature.”
According to the NFIB Research Center, almost two-thirds of 2020 PPP borrowers have applied for loan forgiveness, and another 18 percent are ready to apply as soon as their lenders are ready to accept applications.