The General Assembly has so far failed to find middle ground for tax breaks on forgiven Paycheck Protection Plan (PPP) loans, and will now form a committee of three senators and three delegates to reconcile differences between the two chambers.
While a Senate bill calls for a $100,000 cap on income deductions claimed under PPP expenditures, the House of Delegates bill calls for only a $25,000 cap. When the two chambers considered each other’s bills, the House modified SB 1146 to a $25,000 cap, while the Senate amended HB 1935 to a $100,000 cap. After passing the modified versions, both chambers then rejected the modified versions of their original bills. On Friday, the two chambers agreed to form a conference committee to work together to create a bill that can pass both chambers.
The Virginia General Assembly is moving forward with legislation that would effectively make employers who received Paycheck Protection Plan (PPP) loans liable for state taxes. Bills that would practically exempt all income from the forgiven loans have been replaced with legislation that caps how much of the loan is exempt. Business advocates warn that the taxes could surprise the struggling businesses that the PPP loans were meant to help.
The bills bring Virginia’s tax code into conformity with the IRS; Virginia’s tax law doesn’t automatically change to match federal law, so state legislators pass tax conformity bills.
The Senate passed its $134 billion budget on Friday with funding for criminal justice and police reforms, bonuses for law enforcement, coronavirus relief payments for local school divisions and language eviction and utility disconnect moratoriums.
Senate Bill (SB) 5015 passed the Senate by a vote of (Y-24 N-15) with three Republican members voting alongside their Democratic colleagues on the prevailing side.