Eight states treat forgiven amounts for PPP loans to businesses as taxable income: Arizona, Maine, Minnesota, New Hampshire, Texas, Utah, Virginia, West Virginia,
Five states do not have corporate income taxes—Nevada, Ohio, South Dakota, Washington and Wyoming, Nine states did not reply to the survey: Arkansas, Colorado, Florida, Georgia, Iowa, Kansas, New York, South Carolina, and Vermont.
Otherwise, the response to the pandemic has included some leeway in state taxation with 37 indicating one to six employees who perform non-solicitation activities would create nexus for an out-of-state corporation if the employee is telecommuting from within their state. But half of these states are pausing the nexus requirement because of COVID-19.
The states that will not tax forgiven loan proceeds are Alabama, Alaska, California, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carlina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee and Wisconsin.