A notable piece of legislation that passed through the General Assembly last week was House Bill 334: Temporarily Align PPP Treatment to Federal Treatment. HB 334 allows individual and corporate taxpayers an income tax deduction for expenses paid using a loan forgiven under the Paycheck Protection Program. Thousands of small businesses that secured a PPP loan last year are facing NC tax liabilities on federal money used to keep employees hired and doors open. This legislation conforms to the federal treatment of expenses paid by PPP loans, allowing a deduction for expenses paid by the PPP loans. The bill passed the second reading in the house and is on the calendar for a final reading on April 20.
Another important change to the NC tax law, House Bill 279: COVID-19 Related Tax Changes/UI Technical Corrections passed the House with a unanimous vote last week. The bill clarifies that federal stimulus payments received as COVID-19 relief payments are not considered income for purposes of determining eligibility for property tax exemptions. Additionally, the bill forgives interest on 2020 individual income tax returns filed on or before May 17. On March 17, the IRS extended the federal income tax filing due date from April 15 to May 17. However, the NC Secretary of Revenue was obligated to apply interest on tax payments submitted after the original filing date. HB 279 permits the Secretary to waive those penalties as NC law conforms to federal law.
Lastly, Governor Cooper signed two important education bills into law:
- House Bill 82: Summer Learning Choice for NC Families
- Senate Bill 387: Excellent Public Schools Act of 2021
HB 82 mandates local schools to offer a six-week school extension learning recovery and enrichment program outside of the instructional calendar following the 2020-21 school year. This bill directs the State Board of Education to provide and require units to implement innovative benchmarks to allow teachers to measure students learning loss throughout the school year. Additionally, SB 387 modifies the implementation of the NC ‘Read to Achieve’ program in order to attain statewide reading proficiency by the third grade. This house bill is important because it helps grow and strengthen the talent pipeline in Wake County and North Carolina.
To learn more about our GA priorities, track legislative bills, or to read our blog posts, you can visit our webpage or follow us on Twitter @RcgaJ, @tierra_rcga, or @raleighchamber.