S-3234 ensures New Jersey businesses that received federal assistance under the Paycheck Protection Program (PPP) will not have to pay state income taxes on their loans, even if those loans are forgiven. It also clarifies that companies can deduct business expenses paid for with PPP funds.

S-3305 allows businesses to take a gross income tax credit for COVID-19-related improvements designed to reduce the spread of the virus in nonresidential buildings.

“New Jersey businesses certainly need tax relief and assistance wherever they can get it right now, and both of these bills will be a big benefit.

“To be sure, the notion of New Jersey increasing state taxes off federal aid runs counter to the very purpose and benefit of that aid in the first place. We have heard concern about this potential tax and expense issue from our members who received PPP and we are very pleased that bill S-3234 has taken another step to ensure there are no added state tax liabilities due to PPP.

“We also greatly appreciate the passage of bill S-3305, which gives an important tax benefit for the thousands of businesses who have, and will continue, to make investments to improve safety measures through COVID-19-related improvements. We are very pleased the bill was amended to make the tax credit available to corporation business taxpayers, and not just pass-through businesses.

“NJBIA thanks the sponsors and the supporters of both pieces of legislation and we look forward to working with the Assembly on them moving forward.”