Farm Bureau Asks Congress to Act Quickly on PPP Fix

Farm Bureau Asks Congress to Act Quickly on PPP Fix
Dec 14, 2020
The American Farm Bureau Federation is asking Congress to tweak the Paycheck Protection Program to ensure farmers and ranchers don’t have to pay taxes on their forgiven PPP loans.
 
“The PPP is providing vital working capital to farmers and ranchers who are struggling to remain operational due to the impacts of the global pandemic. The resources provided by the program are helping to maintain viability of American agricultural production by providing farmers and ranchers funds to assist in paying wages, rent, mortgage interest and utilities,” AFBF President Zippy Duvall noted in a letter to Congress.
 
Unfortunately, IRS rules threaten to deny farmers and ranchers a portion of this much-needed financial assistance by declaring that normal and customary business expenses incurred while operating with forgiven PPP loan funds – like payroll, rent, mortgage interest and utility expenses – are not tax deductible. These rules are at odds with congressional intent that any forgiven PPP loan amount “shall be excluded from gross income,” Duvall pointed out in his letter.
 
Two Farm Bureau-backed bills would make this fix by clarifying that payroll, rent, mortgage interest and utilities paid for with forgiven PPP loan funds are deductible business expenses: The Small Business Expense Protection Act (S. 3612) and the Small Business Expense Protection Act of 2020 (H.R. 6821).
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