Summarized from Jade West, National Association of Wholesaler-Distributors
Negotiations continue on a new COVID-19 relief package, but an agreement has not been reached on some significant issues. Among the outstanding issues is how to treat the deductibility of expenses paid with the Paycheck Protection Program (PPP) loan. The business community in Washington D.C. has been fighting an aggressive battle with some on Capitol Hill wanting to limit the deductibility to businesses that took out very small loans. If not that specific policy, we are told that “some compromise” will be in the final legislation, meaning that some PPP borrowers will not be able to deduct PPP-paid expenses.
We are arguing – emphatically – that all PPP borrowers who maintained payroll, especially through the grim first few months of the pandemic, should be entitled to the protections of the language of the CARES Act enacted in March. Nonetheless, arguments are being made that deductibility should be denied to some PPP borrowers, presumably borrowers of larger loans. The statute made no distinction between the size of the loans when it mandated that all PPP proceeds are to be non-taxed income. Clearly, denying deductibility of PPP-paid expenses of ANY employers makes that part of the loan taxable.
If you are a PPP borrower, please call your Representatives and Senators NOW to tell them to enforce the law for ALL employers, not just some. Congress should not be picking winners and losers among the employers who all played by the rules. Tell them how many jobs you protected with your PPP loan and why a tax increase is both unfair and a threat to your business and your workers.
You can reach every office on Capitol Hill by dialing 202-224-3121 and asking for the office of your senators and representatives. Congress is in session now and that is the fastest way to make your voice heard. To find your U.S. representative and his or her contact information, visit house.gov/representatives
and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov
and click on the “Find Your Senators” by state dropdown menu in the top left corner.
There are multiple moving parts to the effort to get a new COVID-19 relief bill passed by Congress and signed by the president. This report is current as we write it, but the situation is very fluid and changing fast. We will keep you updated as the process moves forward.