Bradley introduces late bill to exempt federal funds to help businesses from state taxes

  • Senate majority leader Jeb Bradley is seen during a New Hampshire Senate session at the State House in downtown Concord on Thursday, Jan. 19, 2017. (ELIZABETH FRANTZ / Monitor staff) Elizabeth Frantz

Monitor staff
Published: 2/3/2021 6:42:15 PM

Two months before tax day, New Hampshire lawmakers are racing to pass legislation to protect businesses from paying state taxes on Paycheck Protection Program funds. 

A late bill submitted by Sen. Jeb Bradley, a Wolfeboro Republican, would exempt businesses from paying the state’s business profits tax and business enterprise tax on any money they received through the federal program.

First established by Congress in the CARES Act in March, the Paycheck Protection Program provides loans to businesses during the pandemic, and forgives those loans if the businesses spend a majority of the money on payroll. As stores and companies shut down in the early months of the COVID-19 pandemic, the program was meant to keep employees with their businesses and partially alleviate unemployment programs. 

The program is currently in its third round of funding, after an additional infusion of cash from the end-of-year spending package passed in Washington in late December. 

New Hampshire businesses typically face a tax filing deadline of April 15 for the business profits tax, which taxes 7.7% of their earnings, although partnerships must pay a month earlier.

Because New Hampshire is still tied by statute to the 2018 IRS guidelines, those PPP loans currently count as income and can be taxed at 7.7%.

Legislators are past the deadline to file new bills for 2021, but on Tuesday, the Senate Rules and Enrolled Bills Committee voted unanimously to allow Bradley’s bill in late. He said that he hoped it would be fast tracked and passed through the Senate quickly.

“I would hope that we would have it in a timely fashion so that it can be on the floor by the 18th,” Bradley said. 

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