Many businesses are receiving federal financial assistance to cope with the impacts of the COVID-19 pandemic and wondering whether they owe business and occupation (B&O) tax on the amounts received (including small-business loan forgiveness).
The department has determined that businesses receiving assistance under these federal programs (including the federal Paycheck Protection Program (PPP) program) should not report assistance as gross receipts for B&O tax purposes and should not pay B&O tax on that assistance at the present time.
The department believes that there may be interest in clarifying the applicable statutes, especially after the various programs at issue have been identified and analyzed more thoroughly. Therefore, the department will delay any final decision on taxability or enforcement actions until after the Legislature has had an opportunity to act. In the meantime, no penalties or interest will accrue with regard to any tax that may be due on such receipts until further notice.
If you have questions about any specific COVID-19 assistance that you have received, submit a letter ruling request.