(3/1) House Appropriations Committee Votes to Expand Small Business COVID-19 Relief

The House Appropriations Committee amended Senate Bill 109 to include additional COVID-19 relief for small businesses. The legislation, which appropriates $197 million in educational grants, $570 million for rental and utility assistance, and $145 million for grants to the restaurant and hospitality industry, was amended to exempt income received from the federal Paycheck Protection Program (PPP) from taxation under the state’s Personal Income Tax (PIT).

“Many small business owners were shocked to learn that they would end up owing state taxes on PPP money they received to continue paying their employees,” said Appropriations Chairman Stan Saylor. “Our antiquated tax code already exempts PPP money from taxation for large corporations. We need to help our small businesses, that were most impacted by the governor’s shut down orders.”

Congress exempted PPP income from federal taxation in the Consolidated Appropriations Act of 2021 that was passed by Congress on Dec. 21, 2020. Because the Corporate Net Income Tax (CNIT) conforms to the federal tax base, PPP income is not taxable under Pennsylvania’s CNIT. However, the PIT does not conform to the federal individual income tax base, and therefore PPP income is not automatically excluded from the PIT. Approximately 80% of businesses in Pennsylvania pay the PIT.

House OKs Bill to Help Farmers, Support Agritourism

With Pennsylvania farmers facing ongoing challenges to keep their farms operating and feeding Pennsylvania, the House approved legislation to remove barriers to agritourism and help farmers diversify. House Bill 101, creates the Agritourism Activity Protection Act, which aims to promote agritourism business in Pennsylvania and provide these businesses with limited liability protection.

Farmers sometimes open their farms to the public for seasonal pick-your-own events, hayrides and corn mazes. While these activities provide farmers a secondary source of income, they pose risks should anyone be injured. House Bill 101 would protect agritourism businesses from lawsuits where no party is at fault for injuries or damages. The legislation would require farmers to post multiple signs warning visitors of potential risks or ask visitors to sign a waiver of liability before participating in activities. The right to sue would still apply if an owner acts in a grossly negligent manner or operates without regard for public safety. The bill is now under consideration in the state Senate.

Savings Program Fees Reduced for People with Disabilities

Fees for the Pennsylvania Treasury’s PA ABLE program are being reduced because the National ABLE Alliance – of which Pennsylvania is a leading member – recently met a $150 million asset milestone. PA ABLE helps Pennsylvanians with disabilities and their families save without affecting eligibility for federal and state benefits. Fees are being lowered by two basis points, or 0.02%. The PA ABLE Program offers account owners seven different tax-advantaged savings options, including an interest-bearing checking account with accompanying debit card. Account owners pay no federal or state income tax on savings growth or withdrawals for qualified disability-related expenses. Contributions up to $15,000 per year can be deducted on state income tax benefits — a benefit exclusive to PA ABLE. PA ABLE accounts can be used for a large variety of qualified disability-related expenses such as housing, education, health care, transportation, assistive technology and more. For more details about eligibility and to learn how to save with PA ABLE, visit paable.gov or call 855-529-ABLE (2253). Follow the Pennsylvania Treasury Department on Twitter for more information on its programs or visit patreasury.gov.