After an outpouring of widespread opposition from business leaders following the Legislature’s recent unexpected decision to tax forgiven Paycheck Protection Program (PPP) loans in tax year 2021, the Legislature has yet to advance legislation to adjust the harmful change. The language providing the new tax was included as a last-minute change to a COVID-19 relief bill.

Without legislative action, the recent changes would apply a tax to forgiven 2021 PPP loans as if they were income. The Vermont Chamber and other business organizations sent a letter to the Legislature requesting they conform to federal treatment of forgiven PPP loans in the tax year 2021, as was the congressional intent of the forgivable loan program.

In the wake of an economically devastating pandemic, most employers are ill-equipped to pay this new and unexpected tax bill. The issue will be considered in the Senate Committee on Finance on Tuesday. Please contact Vermont Chamber Government Affairs Director Charles Martin with questions or for help with contacting your legislators to oppose the tax.