UPDATE POSTED 5:30 P.M. TUESDAY, FEB. 23, 2021
LEXINGTON, Ky. (WTVQ) – The Lexington Urban County Council gave tentative approval Tuesday afternoon to a proposal that could save businesses about $2,500 on their local taxes on average.
The Council backed Mayor Linda Gorton’s plan to give businesses the ability to deduct expenses paid with paycheck protection program funds last year.
The average loan in Fayette County was about $100,000. That translates into the $2,500 savings, city staff told Council members during a work session.
If approved by the full Council Thursday night, city leaders think it will reduce city revenues about $2 million this year.
“It is a significant hit to our revenues, but I think it is the right thing to do for our businesses,” Gorton said.
The state and federal governments are considering the same tax law changes.
In addition, eight months after a successful program helped keep hundreds of small businesses open, Lexington has its eyes on a repeat.
Tuesday, the Urban County Council’s Finance Committee encouraged city leaders to put the finishing touches on another small business grant program. The program will likely be a hybrid from last year’s $2.5 million that provided grants averaging almost $15,000 to scores of businesses, almost all of them small. minority-owned outlets.
Council members say they want to build on any lessons learned and make sure the effort targets those most still in needs.
“We made this together, we made it make sure that we are helping the people that need it, but I just know that sometimes there is a loop hole in there and we end up giving people money that didn’t need to be helped, but we have to be fair and everybody should be treated the same, but I am in favor of what we are all doing,” Urban County Council member Richard Mohoney said.The Council could approve the details as early as next month.
ORIGINAL STORY POSTED 11 A.M. TUESDAY, FEB. 23, 2021
LEXINGTON, Ky. (WTVQ) – Lexington Mayor Linda Gorton is asking the Urban County Council to approve additional tax relief for local businesses.
The resolution gives businesses the ability to deduct expenses paid with Paycheck Protection Program funds in 2020. The request will go before the Urban County Council when it meets Tuesday afternoon.
“Our entire community has been fighting through the effects of COVID-19,” Gorton said. “This opportunity gives our businesses support. Business have been doing all they can to keep their doors open, and employees paid. I’m proud of our business owners for their flexibility in caring for their employees and our community. This is something the City can do to help them … it’s the right thing to do.”
Although the change could have been made through Executive Order, Gorton values collaborative work with the Council.
Under the recommendation, businesses will be allowed to deduct expenses paid from PPP loans in 2020. The adjustment follows similar steps taken by the federal government, and under consideration at the state level. This move is expected to save the average Lexington business around $2,500 in local taxes.
The City has taken several actions to help local businesses through the pandemic, including allowing restaurants, bars and retail businesses to expand service onto sidewalks and parking lots, suspending ABC license fees, and offering a small business stimulus program that provided critical financial support for local businesses, especially those owned by minorities and women.
There have been additional programs to support individuals and families needing assistance with rent, utilities, and food access.