S.B. 3234 was approved 12-0 by the Senate Budget and Appropriations Committee. The bill, sponsored by Sen. Troy Singleton, D-Moorestown, and Sen. Anthony M. Bucco, R-Boonton, would allow the deduction of expenses paid for by federal Paycheck Protection Program loans when those loans are forgiven. It would also ensure that forgiven small-business loans issued as a part of the Coronavirus Aid, Relief and Economic Security Act would not be subject to the state's income tax.
The bill was introduced in December.
The expense deduction was originally counter to Internal Revenue Service guidance that didn't allow loan recipients to deduct the expenses from federal returns. But recent changes made in the Consolidated Appropriations Act clarified that expenses paid for with money from Paycheck Protection Program loans created under the CARES Act would be deductible for federal income tax purposes.
--Additional reporting by Maria Koklanaris and Jaqueline McCool. Editing by Vincent Sherry.
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