Tax News and Views PPP & Streaming Taxes Roundup

November 2, 2020

PPP Borrowers May Need to Explain Themselves in New Forms – Eric Yauch, Tax Notes ($). “Businesses that took millions in loans to make it through the economic downturn must answer some thorny questions to have those loans forgiven on a tax-free basis under draft forms that are circulating among practitioners.”

The Small Business Administration published a notice last week asking for input on forms requesting information from the borrower to determine if they needed the loan. Eide Bailly’s Adam Sweet was quoted in the article:

“Form 3509 states that the government, apparently, is asking borrowers with loans in excess of $2 million to demonstrate gross revenue declines, inability to access liquidity from another non-PPP source, and other requirements,” Sweet said. “This whole exercise seems a bit unfair given that many borrowers applied for their loan in good faith and maintained full payroll, seemingly in furtherance of the statutory goals of the PPP, and yet now the government is questioning their original eligibility for the PPP loan.”

Related: Why You Need a Trusted Adviser to Help with Your PPP Loan Forgiveness.

SBA Announces Will Create Questionnaire to Determine Need for PPP Loans, Purported Copies Being Circulated Online – Ed Zollars, Current Federal Tax Developments. “A number of sources are reporting that the SBA has begun circulating two forms to be completed by borrowers with PPP loans in excess of $2 million, to provide information for determining the necessity of their borrowings.”

Deducting losses in the CARES Act’s window – Richard Ray, CPA, Ph.D., Journal of Accountancy.

“One important change under the CARES Act was to temporarily loosen restrictions on the net operating loss (NOL) deduction under Sec. 172, which creates an opportunity for some businesses to get an infusion of cash by filing an application for a tentative carryback adjustment under Sec. 6411. It is reasonable to believe that with little to no revenue coming in for months, many businesses across the nation will sustain losses this year, thus creating an NOL. It is critical for those businesses and especially their financial advisers to be updated on the current rules surrounding the NOL deduction.”


Check Your Netflix Charges. More Governments Are Trying To Tax Streaming. - Liz Farmer, Forbes. “As states and cities face massive budget shortfalls from the Coronavirus recession, taxing streaming services is getting more appealing.”

“Earlier this year, a handful of cities took steps that would allow them to tax streaming services. Four cities in Indiana, including Indianapolis, as well as New Boston, Texas, have sued streaming platforms like Netflix and Hulu, claiming they’re owed municipal franchise fee payments. The localities claim that the services should be required to pay a 5% franchise fee of gross revenue because they use internet equipment in the public right-of-way to transmit programming.”


Key ballot measures to watch on state taxesNaomi Jagoda, The Hill. “There are at least 30 tax- and revenue-related measures on the ballot in 16 states across the country, according to the National Conference of State Legislatures, sparking fights over property taxes, income taxes and excise taxes.”

Rocker Gene Simmons Kisses Off California Taxes, Should You Too? Robert Woods, Forbes. “Kiss rocker Gene Simmons announced he wanted to leave California for tax-free Washington state, putting his $22 million Beverly Hills California estate on the market.”


Foxconn objects to Wisconsin’s denial of tax credits – Associated Press. “The Wisconsin Economic Development Corp. earlier this month said Foxconn did not qualify for tax breaks based on capital investments and hiring done in 2019. The state economic development agency determined that Foxconn, the world’s leading electronics manufacturer, only hired 281 full-time employees who are eligible to count toward tax credits at its facility in southeastern Wisconsin and made just $300 million in capital expenditures.”

Expand Full Article

We're Here to Help

We are here to help
From business growth to compliance and digital optimization, Eide Bailly is here to help you thrive and embrace opportunity.
Speak to our specialists