HI HB870

Conforms Hawaii income tax law under chapter 235, Hawaii Revised Statutes, to federal provisions regarding Paycheck Protection Program (PPP) loan forgiveness under section 7(a)(36) of the Small Business Act.

Excludes from gross income any amounts received by eligible PPP loan recipients when their indebtedness has been forgiven, in accordance with section 7A(i)(1) of the Small Business Act as amended.

Prohibits denial of deductions, reduction of tax attributes, or denial of basis increases for PPP loan recipients due to the exclusion of forgiven loan amounts from gross income.

Applies to taxable years ending after March 27, 2020, conforming to federal tax treatment established in Revenue Ruling 2021-2 and the Consolidated Appropriations Act of 2021.

Takes effect upon approval.