Last week, MPBP broke the news that Maine will tax forgiven PPP loans unless state law changes. On July 30, the Legislature’s Tax Committee will finally start to address this issue.

On July 20, MPBP made Mainers aware that Maine Revenue Services had issued an important tax alert for individuals and businesses. Because the Mills Administration and the Legislature have not yet acted, the state will collect taxes on forgiven Paycheck Protection Program loans. In addition, conflicts between federal and state tax law will complicate preparing and filing state taxes.

Two days after MPBP broke the story, the Portland Press Herald confirmed MPBP’s report. The Press Herald noted that Maine’s CPA association had sent a letter to Governor Mills more than two months ago to bring this problem to her attention.

Finally, the Legislature is taking preliminary steps to match Maine’s tax code to the federal code. The sooner this is changed, the sooner individuals, businesses, and accountants can use the changes to keep their business alive and people employed.

The Taxation Committee will meet Thursday, July 30, at 10 a.m. to take up a bill addressing this issue. But even if the Tax Committee passes a bill that solves the problem, that won’t be enough. The full Legislature needs to pass it and Governor Mills needs to sign it. And the final bill should fully match the federal changes.

However, the Legislature is still in a stalemate over coming back into session. The Democrats want all bills, including the unfinished business from before the lockdown, on the table.  The Republicans want to take up only bills related to the COVID situation and the economic fallout.

Now is the time to contact members of the Taxation Committee to let them know Maine should match federal tax law and also contact your legislators urging them to take care of the COVID-related bills.

Please contact the Tax Committee about Maine Tax Conformity urging them to fully comply with the exemptions Congress and the Trump Administration created to help get through this crisis.

View the information about the draft legislation at the Taxation Committee home page. The links to the documents for the July 30 meeting are posted  and you can also download them from the box called “related downloads.”