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Struggling Virginia businesses may now face another burden: paying taxes on PPP loans By Sierra Fox Virginia legislators weigh PPP loan tax deductions Back in December, the federal government approved legislation to allow businesses to deduct the PPP loans from federal income taxes. Virginia does not agree with the federal government to fully deduct the PPP loans. The Commonwealth wants to tax businesses to gain state revenues. FALLS CHURCH, Va. (FOX 5 DC) - Thousands of businesses in Virginia applied for PPP loans to keep them from having to lay off their employees. Joe Huh, Alphagraphics co-owner, is upset he may get dinged for taking the money. ....