March 11, 2021 4:35pm
Op-ed: GLI CEO urges Kentucky lawmakers, governor to take action on PPP tax relief
This article first appeared in Louisville Business First on March 11, 2021.
Imagine being a small business owner in our community. You finally see a glimmer of light at the end of the long tunnel of this pandemic and your business is picking back up.
After a year of great uncertainty, you sit down to file your taxes and find an unexpected state tax increase. It turns out that you cannot deduct expenses you traditionally deduct from your overall tax burden because the Paycheck Protection Program (PPP) loan that you used to pay for them has been forgiven.
Unfortunately, this is the current reality for small business owners in Kentucky.
When small businesses hurt, our whole community hurts. Economic restrictions undoubtedly had a disproportionate impact on many of Greater Louisville’s small businesses who were forced to close or greatly reduce capacity.
I have been amazed at the courage of these businesses, who abided by state and local guidance, and sacrificed their own financial stability in the name of public health and safety. Now as our vaccination rates increase and our economy starts to reopen, we must make sure businesses do not face any additional obstacles in their recovery.
To fix the problem, the Kentucky General Assembly must give final passage to House Bill 278 and Gov. Andy Beshear must sign it into law. HB 278 will allow businesses to deduct expenses paid with forgiven PPP loans from their overall tax burden.
This simple fix has been implemented at the federal level and by many of our neighboring states, including Indiana. As we near the final month of tax season, this legislation must get signed into law quickly to give employers relief and certainty.
PPP loans were issued with the intention of supporting vulnerable businesses who suffered significant revenue losses because of the Covid-19 pandemic. The loans helped to keep businesses afloat, Kentuckians employed, and our economy running.
I hear every day how this program has saved some of our community’s most cherished businesses and many of our entrepreneurs’ livelihoods. These are our neighbors and friends who poured their hearts and savings into a business only to be blindsided by a global pandemic no one could have predicted.
While it has helped many businesses, I recognize the program has not been perfect. In fact, Greater Louisville Inc. has been a vocal advocate for tweaks to the program along the way. That includes extension and expansion of the program and a simplified forgiveness process.
The fix outlined in HB 278 is equally as important and will eliminate another hoop businesses will have to jump through to fully recover from this pandemic. Without this fix, Greater Louisville businesses will be hit harder than any other part of the state, as over 30% of all PPP loans received in Kentucky came directly to our region.
I urge the community to take action and reach out to their elected officials to ensure businesses are protected.
For the past year, businesses have put their own personal and financial interests on the back burner and stepped up to protect the health of our community. As we look ahead to brighter days, we must ensure their sacrifices are recognized and they are supported as they seek to rebuild.
The General Assembly and Gov. Beshear must do what is best for our economy and quickly pass and enact HB 278.