(The Center Square) – A key legislative committee has approved a plan to exempt thousands of New Hampshire businesses from paying state taxes on federal pandemic relief loans.
The Paycheck Protection Program was approved as part of the $2.2 trillion CARES Act passed by Congress in March to help keep small businesses afloat during the current pandemic.
Under the law, borrowers are eligible for PPP loan forgiveness if at least 60% of the proceeds go toward payroll expenses.
A second pandemic relief package approved by Congress in December provided another round of forgivable PPP loans, and allowed businesses to claim tax deductions for the expenses they covered with forgiven loan proceeds.
More than 41,100 New Hampshire businesses received about $3.7 billion through the first round of the loan program, according to U.S. Treasury data.
Congress exempted PPP loans from federal income taxes, but New Hampshire is one of 18 states where loans are taxed, according to the Washington, D.C.-based Tax Foundation.