Thank you for subscribing to our Newsletter MABETAX June 2020. The U.S. House approved legislation Thursday, May 28, 2020, relaxing the requirements for small businesses and other recipients of Paycheck Protection Program (PPP) funding to qualify for forgiveness of the loans.
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MABE International Advisors, Inc. can help you determine if this new regulation may apply to your business and help you avoid costly penal- ties and interest. Whether your business needs bookkeeping for the PPP forgiveness applications or Nexus sales tax application, Mabe International Advisors can help you.
The House bill, called the Paycheck Protection Flexibility Act, is planned to be extended from eight weeks to 24 weeks the time PPP loan recipients have to spend their funds. The measure also lowers payroll spending costs, to 60% from 75%, the portion of PPP loan funds borrowers must spend on payroll costs to qualify for full loan forgiveness. This change allows borrowers to use more funds for costs like rent, mortgages and utilities.
A bill pending for a vote in the Senate would double the covered period of PPP spending to 16 weeks but would not change the 75% payroll cost requirement. Critics of the eight-week loan forgiveness period have said that it doesn’t offer enough flexibility for businesses affected by state and local governments, keeping many types of businesses closed or operating at significantly reduced capacity to slow the spread of COVID-19.
Critics of the 75% rule contend that it does not accommodate businesses for which payroll is not 75% of monthly expenses or those whose employees haven’t been able to work because of government-imposed business closures.
The House passed bill also more than doubles the minimum term period for repayment for loans to five years from two years and allows companies whose loans are forgiven to delay payment of payroll taxes. The PPP forgiveness application states an average of 180 minutes is needed to complete, “But there are many holes in the application and unanswered questions that were not entirely cleared up with the Interim Final Rule
Loan funds must be used a certain way, otherwise business owners risk the loan not being fully forgiven and end up incurring at least some debt. MABE International Advisors, Inc. can help you determine the best way to use your loan funds to obtain the loan forgiveness that is right for your business.
Some business owners decided not to spend their aid and, if legislation passes changes to the bill, may be rewarded for having taken that risk.
MABE International Advisors, Inc. can help you navigate the changing regulations and deadlines so you may get the most out of your PPP forgiveness application.
If you are doing online sales you may have a sales tax liability in states other than where you are operating, due to the South Dakota v. Wayfair, Inc., a Supreme court case. If you are doing online sales in states that exceed $100K and more than 200 transactions, threshold for example that vary by state, you may need to collect sales taxes in these states even if you do not have a physical location in these States due to South Dakota v. Wayfair, Inc.
On June 21, 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state.
What does this mean for business owners?
The name given to this act is the “Economic Nexus “state charts or remote seller. This went into effective July 1, 2018 with soft deadlines for many of the 30+ states that have nexus provisions.
If you are a business with sales using the internet of $100,000 and 100 transactions per any state, you need to ask a tax professional if Nexus applies to your business.
MABE International Advisors, Inc. are helping many clients determine their liability issues within the US and international companies. MABE International Advisors, Inc. can help you apply for state sales tax certificates and navigate the Nexus rules applies to your business.
MABE International Advisors, Inc. can help you determine if this new regulation may apply to your business and help you avoid costly penalties and interest.
Whether your business needs bookkeeping for the PPP forgiveness applications or Nexus sales tax application, Mabe International Advisors can help you. With reliable QuickBooks accounting or accurate cost control methods that can reduce your tax liabilities with custom attention tailored to your business accounting and tax needs, MABE delivers.
MABE International Advisors, Inc. specializes in international business needs and a wide range of US tax issues.
MABE International Advisors, Inc.
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