12/27/2023 0 Comments Ppp gross receipts![]() and the BPOL regulations provide the only authority to determine “gross receipts” for BPOL. ![]() The Ruling notes that, while the CARES Act specifically created an exclusion from the definition of income for purposes of income tax, that determination under the CARES Act is not dipositive for purposes of BPOL. Generally, loan forgiveness would be considered income under Internal Revenue Code Sec. 61(a)(11). Under certain circumstances, the loan proceeds would not have to be repaid, and the loan would be forgiven. Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in March 2020, loans were made to taxpayers under the Payroll Protection Program (PPP). The Virginia Department of Taxation has issued a ruling that addresses the question “does the receipt of a PPP loan and its possible forgiveness constitute gross receipts for purposes of the Business, Professional, and Occupational License (BPOL) tax?” Since BPOL audits occur after the annual filings, these steps will help preserve the record and document the exclusion.Print Download Are PPP Loan Proceeds Gross Receipts for the Purposes of BPOL? By: Taxpayers who have received PPP loans and subsequent loan forgiveness need to segregate and/or note the removal of the loan proceeds from the income recognition calculation for accounting purposes when doing their BPOL returns. ![]() 58.1-3732 specifically cites loan proceeds.īased on these provisions, the Commissioner has held that loan proceeds from PPP are not to be considered “gross receipts” for purposes of BPOL “regardless of whether some part or all of such loans are forgivable or not.” 58.1-3732 (A) which states that gross receipts “shall not include any amount not derived from the exercise of the licensed privilege to engage in a business or profession in the ordinary course of business.” One of the exclusions cited in Va. ![]() The ruling hinges on whether the PPP loan proceeds result from “the exercise of the licensed privilege…in the ordinary course of business.” The ruling states that “loan proceeds are not received by “exercising the license privilege to engage in the ordinary course of business, by for example, providing services or selling goods in the ordinary course of business.” In further support of the decision by the Commissioner that PPP loan proceeds are not included in BPOL “gross receipts,” the Commissioner cites Va. Under BPOL regulations, “Gross receipts are defined as “ he whole, total, entire receipts, of money or other considerations received by the taxpayer as a result of transactions with others besides himself and that are derived from the exercise of the licensed privilege to engage in a business or profession in the ordinary course of business.”
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |