Alison P. Sucy, Director of Government Affairs & Workforce Development
Government Affairs Update
PPP & State Income Tax
The Governor’s supplemental budget proposes to charge state income tax on forgivable PPP loans, which are tax exempt at the federal level. Due to the public outcry against this proposal, the administration is attempting to change this policy by looking to the federal government to provide the state funds to offset the cost of conforming with the federal policy.
The legislature’s Taxation Committee has been reviewing the tax portions of the budget and has not yet voted on a recommendation to the Appropriations Committee to tax PPP income or not. Tax Committee members have had two work sessions on conformity, and policy and procedural disagreements, breaking down largely on party lines, have delayed the vote. The Tax Committee should resume its discussion and, hopefully, vote on Tuesday, February 9 at 10:30 AM. This is a work session and there is no public comment. However, you can contact members of the committee (addresses below and more information found here).
We know that so many of our businesses are still suffering. Many that managed to survive 2020 are barely hanging on now and can’t afford a state income tax bill on PPP funds.
If you believe the state should conform to the federal tax treatment of the PPP loans and not tax PPP funds as income, you can write a message to the members of the Taxation and Appropriations Committees encouraging them to vote to conform tax treatment of PPP loans with the federal government.
LD 235, An Act Regarding the Treatment of Vacation Time upon the Cessation of Employment, (Rep. Roeder, D-Bangor) will have a public hearing in the Labor Committee on Wednesday, February 10 at 11:00 AM.
The bill amends the law governing the provision of vacation pay on cessation of employment. Under current law, on cessation of employment, if the terms of employment or established practice includes provisions for paid vacations, vacation pay has the same status as wages earned. This bill would provide that on cessation of employment all accrued vacation pay must be paid to the employee.
If you would like to provide written testimony, you may do so through the submission portal here. You can watch the hearing on the Labor Committee’s YouTube channel here. There are two bills being heard beginning at 11:00 AM and they may be taken up in any order.
With the vaccination schedule moving forward, we have received many questions about how vaccinations may change the travel restrictions. Currently, there is no change for out-of-state visitors regardless of their vaccination status. Here is a statement from the Maine Department of Economic and Community Development:
The rules requiring quarantine or a recent negative test for travelers from states other than New Hampshire and Vermont were established by an executive order from Gov. Mills and remain in place. They reflect an abundance of caution based on the discovery of COVID-19 variants in other states, the small percentage of potential travelers who have had both doses of the vaccine, the length of time required for the vaccine to become fully effective after the second dose, and other public health considerations. As more people become fully vaccinated and as scientists learn more about the variants and the effectiveness of vaccination against them, travel rules could be reviewed. A recent change to quarantine guidance for close contacts is specific to people identified as close contacts of COVID-19 cases. Quarantine guidelines for close contacts are not directly applicable to travelers from non-exempt states.