Effective June 19, 2020, Amended Substitute House Bill Number 481 excludes from the definition of gross receipts found in Ohio Revised Code 5751.01(F) any forgiven indebtedness that is excluded from the gross income of the taxpayer for federal income tax purposes pursuant to section 1106(i) of the “Coronavirus Aid, Relief, and Economic Security (CARES) Act,” 15 U.S.C. 9005(i). As a result, any forgiven PPP loans will not be subject to the Commercial Activity Tax.
Ohio joins other states that have already provided guidance that the forgiven PPP loans will not be subject to tax. As of the date of this Buzz, the states listed on the chart below have provided taxability guidance.
We will be updating this list of states as more states provide guidance. Click here for a link to our website and the chart.
While the Ohio Legislature has addressed the taxability of the PPP loan forgiveness for CAT purposes, no guidance has been issued as it relates to whether the PPP loan forgiveness is subject to state personal income tax or municipal income tax.
If you would like to discuss the taxability of PPP loan forgiveness or any other state and local tax matter, please contact John Trippier, Derek Heyman or any other ZHF professional.