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Maine State Chamber: Supplemental Budget Bill Finally Passes House and Senate with Full Conformity on PPP Loans, Study on FDII

From a Maine State Chamber E-mail Alert on March 12, 2021

Supplemental Budget Bill Finally Passes House and Senate with Full Conformity on PPP Loans, Study on FDII

Vote secures $100 million for 28,000 businesses across state

Late Thursday night, the Supplemental Budget bill was finally passed, and is now on Governor Mills’ desk.

In votes of 139-1 in the Maine House of Representatives, and by unanimous vote in the Maine State Senate, lawmakers agreed to full conformity at $100 million on the Paycheck Protection Program (PPP) loans taken as a result of the pandemic by tens of thousands of Maine businesses from around the state.  On behalf of the Chamber’s members, we would like to thank the Administration, Democrats, and Republicans for their bipartisan work to secure this outcome.

Passage of the supplemental budget bill on an emergency basis is extremely important to the 28,000 businesses across the state that have been hit hard by the COVID-19 pandemic.  Had the Legislature not voted the way they did, in only four days, businesses would have had to pay income taxes on these loans, which could have been the deciding factor in whether some businesses remained open or had to close their doors. Forgiving these loans will help to ensure that businesses have a chance to stay open and jobs stay here in Maine.  Also included in the budget was a provision to exempt the first $10,200 of unemployment benefits from state income taxes. 

Over the past week, the Chamber worked closely with the Mills Administration and Democrat and Republican leadership for full conformity on PPP and on another provision in the supplemental budget that became a sticking point during the debate: the Foreign Derived Intangible Income (FDII) provision.  The Chamber worked over the weekend with legislative leadership and the Administration to clarify the incredible amount of confusion regarding FDII.  FDII is a deduction available to Maine taxpayers that derive income from exports.  Because the impact to Maine-based businesses was not entirely clear, it was decided that a study be done to determine the actual impact if it were to be eliminated.  The funding for the program was set aside in the “rainy day” fund pending the outcome of the study.

Once again, the Chamber would like to thank Governor Mills, both Republican and Democratic leadership, and all those legislators from both sides of the aisle who came together to help Maine business and their workers.