Lexington’s City Council is backing Mayor Linda Gorton’s recommendation for some coronavirus related tax relief for local businesses. Council acted Tuesday to place the item on an upcoming meeting docket.
The local provision would allow businesses to deduct expenses paid from paycheck protection program loans in 2020. Gorton admitted it will affect city finances. “I think it’s the right thing to do. You know it will have a fairly big impact on our revenues,” said Gorton.
During council discussion, Director of Revenue Wes Holbrook said it could be a couple million dollars loss to city coffers in the coming fiscal year. “This will allow any expenses that businesses took when they got a PPP loan to be deducted from their net profits. So, what the result of that will be is any business that received those funds will have less taxable income that they would then pay their two and quarter percent on for their business taxes,” explained Holbrook.
If given final approval at a subsequent council meeting, the average Lexington business would save around $2500 in local taxes. Council Budget Committee Chair Amanda Mays Bledsoe said she had gotten some questions about this issue. She says it’s appropriate considering similar action taken at the federal level and a pending matter in Frankfort.
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