Seven of the 13 members of the Joint Taxation Committee voted to support the budget revisions submitted last week by Democratic Gov. Janet Mills, which would allow forgiveness of federal Paycheck Protection Program loans and allow related deductions by exempting up to $1 million in income.
In a statement issued Tuesday, Mills said that the Department of Economic and Community Development estimated that 27,000 Maine businesses employing 184,000 workers received $1 million or less in PPP loans, representing over 99% of all state businesses that received the federal loans.
Businesses that receive over $1 million would have those excess proceeds treated as taxable income eligible for offsetting deductions, the statement added.
The committee also agreed to the governor's revisions that apply similar PPP tax treatment to federal economic injury disaster loans and clarify a temporary expansion of a state credit for taxes for remote workers to say the remote work in Maine must have started because of the pandemic.
The revisions to PPP provisions are estimated to cost Maine an additional $75 million in the 2021 fiscal year and $7 million in the next fiscal year, while the changes for economic injury disaster loans would cost $2.3 million for 2021, according to legislative records.
The committee's reported recommendations — including a Republican-backed minority report endorsing full federal conformity and the committee chair's report supporting conformity to federal PPP forgiveness but not related deductions — will be sent to the Joint Standing Committee on Appropriations and Financial Affairs for consideration.
--Additional reporting by James Nani. Editing by Leah Bennett.
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