Late last night,
Congress approved a $2.3 trillion funding
package, which includes $1.4 trillion in
government funding and $900 billion in COVID
relief. The legislation extends the Small
Business Administration’s (SBA) Paycheck
Protection Program (PPP) and clarifies
PPP expenses as tax deductible. The
bill also provides $600 stimulus checks for
adults and dependents, restores $300/week in
additional unemployment assistance, increases
SNAP benefits by 15 percent for six months (but
does not expand eligibility), and allocates $20
billion in new targeted economic injury disaster
loans (EIDL) for low-income communities.
Congressional leaders, however, could not reach
an agreement to include Democratic priorities
for additional state and local government aid
and Republican’s liability protections.
Meanwhile, President Trump signed a seven-day
government spending bill, averting a federal
shutdown, as the White House awaits formal
paperwork after Congress cleared the 5,593-page
government spending/COVID-19 relief package. The
President is expected to sign the massive
funding package into law.
Notable
provisions also include:
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The Oil
Spill Liability Tax (OSLT) is extended
through December 31, 2025. The nine
cents per barrel OSLT tax is imposed on
crude oil at the refinery gate. Proceeds
from the OSLT go into a trust fund used by
the Coast Guard to pay for clean-up after
accidents like oil spills.
-
“Preventing Online Sales of E-Cigarettes to
Children Act” which prohibits
online sales of e-cigarettes to minors by
applying the same safeguards already in
place for regular cigarettes and smokeless
tobacco products. EMA supported this
provision.
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$284
billion for the Paycheck Protection Program
(PPP). Businesses seeking a second
PPP loan will need to demonstrate that they
have fewer than 300 employees and at least a
25 percent reduction in gross receipts in
the first, second or third quarter of 2020
relative to the same 2019 quarter.
Establishes a maximum loan amount of two
million dollars; Expands list of eligible
expenses to include covered operations
(software, cloud computing, and other human
resources and accounting needs); property
damage costs due to public disturbances that
occurred during 2020 that are not covered by
insurance; covered supplier costs; and
covered worker protection expenditures
(PPE). Clarifies that other
employer-provided group insurance benefits
such as group life, disability, vision, or
dental insurance are included in payroll
costs. New entities may receive loans of up
to 2.5 times the sum of their average
monthly payroll costs.
-
Creates a
simplified one-page PPP loan forgiveness
application for loans under $150,000.
-
Supplies
two billion dollars to enhance the SBA’s
existing government guarantee loan programs,
including the 7(a) Loan Program, the 504
Loan Program and the Microloan Program.
Waives borrower and lender fees
within the 7(a) and 504 loan programs.
Increases the 7(a) loan guarantee to 90
percent from a range of 50-85 percent; Extends the one million dollar loan
limit for SBA Express Loans; Establishes a
504 Express Loan Program and enhances the
Microloan program in order to provide
financial and technical assistance to
businesses impacted by the COVID-19
pandemic.
-
Extension
and expansion of the Employee Retention Tax
Credit (ERTC) through June 2021.
Increases the credit rate from 50 percent to
70 percent of qualified wages; Expands
eligibility for the credit by reducing the
required year-over-year gross receipts
decline from 50 percent to 20 percent and
provides a safe harbor allowing employers to
use prior quarter gross receipts to
determine eligibility; Increases the limit
on per-employee creditable wages from
$10,000 for the year to $10,000 for each
quarter; Increases the 100-employee
delineation for determining the relevant
qualified wage base to employers with 500 or
fewer employees.
-
Temporary
allowance of full deduction for business
meals. The provision provides a
100-percent deduction for business meal food
and beverage expenses provided by a
restaurant that are paid or incurred in 2021
and 2022. Currently, the deduction is
available for only 50 percent of such
expenses.
-
Provides
$20 billion to restart and extend the SBA’s
EIDL Advance Grant for small businesses in
low-income communities through December 31,
2021. Eligible entities must be
located in a low-income community; suffered
an economic loss of greater than 30 percent;
and employs not more than 300 employees.
Makes entities in low-income communities
that received an EIDL Advance under Section
1110 of the CARES Act eligible to receive an
amount equal to the difference of what the
entity received under the CARES Act and
$10,000. Provides $10,000 grants to eligible
applicants in low-income communities that
did not secure grants because funding had
run out. Extends time for SBA to approve and
disburse Emergency EIDL grants from 3 to 21
days.
-
Replenishes the EIDL Advance fund, which
allows businesses suffering a substantial
economic injury to apply for an advance that
does not need to be repaid or up to $1,000
per employee limited to $10,000 total.
Prior law stated that any EIDL
Advance received would reduce PPP Loan
Forgiveness, essentially requiring the
Advance to be repaid. The new Act repeals
this provision so the receipt of an EIDL
Advance will have no impact on PPP loan
forgiveness. Borrowers that have already
applied for and received loan forgiveness
presumably may now amend their application
to request that the $10,000 EIDL Advance (or
amount actually received) not reduce their
forgiveness amount and request repayment.
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The
Alternative Fuel Refueling Property Credit
is extended through December 31, 2021.
The credit applies to fueling equipment for
natural gas, propane, liquefied hydrogen,
electricity, E85, and
diesel fuel blends containing a minimum of
20 percent biodiesel. The amount of the tax credit is 30
percent of the cost, not to exceed $30,000
per location for business property and
$1,000 for property installed at a principal
residence.
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Alternative Fuel Mixture Excise Tax Credit
is extended through December 31, 2021. An alternative fuel blender that is
registered with the IRS may be eligible for
a tax incentive on the sale or use of the
alternative fuel blend (mixture) for use as
a fuel in the blender's trade or business.
The credit is 50 cents per
gallon of alternative fuel used to produce a
mixture containing at least 0.1% gasoline,
diesel, or kerosene. Qualified alternative
fuels are liquefied hydrogen, P-Series fuel,
liquid fuel derived from coal through the
Fischer-Tropsch process, and liquid fuel
derived from biomass. The incentive must be
taken as a credit against the blender's
alternative fuel tax liability. The tax
credit is not allowed if an incentive for
the same alternative fuel is also determined
under the rules for the ethanol or biodiesel
tax credits.
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The
residential energy efficiency tax credit is
expanded and renewed through December 31,
2022 for water heaters, furnaces,
boilers, heat pumps, building insulation,
windows and roofs placed in service through
2022. Beginning in 2021, the definition of
eligible property is expanded to include
qualified energy efficient biomass fuel
property with a thermal efficiency rating of
at least 75 percent. Correspondingly,
biomass stoves will no longer qualify under
section 25C, to prevent a double benefit.
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Makes
permanent the 179D Energy-Efficient
Commercial Buildings Tax Deduction
that offers building owners a deduction of
up to $1.80 per square foot for next-level
energy-efficient improvements made to
heating, ventilation and air conditioning
(HVAC) systems; the building envelope,
including windows; and lighting upgrades
that exceed ASHRAE Standard 90.1 by 50
percent.
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Extends
the Fuel Cell Motor Vehicle Tax Credit and
alternative fuel refueling property credit
through 2021 as well as extends the
ten percent credit for two-wheeled electric
scooter plug-in vehicles that is capped at
$2,500.
-
Extends
the Non-Business Energy Property Tax Credits
through 2021 which provides a tax
credit -- 10 percent of cost up to $500.
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Rescinds
$1.9 billion from the Advanced Technology
Vehicle Manufacturing loan program
created by the 2009 stimulus which would
curtail a funding stream for Biden’s
anticipated electric vehicles push.
-
Provides
$3.75 billion for the Low-Income Home Energy
Assistance Program.
-
Reauthorizes the Weatherization Assistance
Program through 2025 and allow
funds for the program to be used on
renewable energy.
-
Provides
$6.5 million for the Northeast Home Heating
Oil Reserve.
The
COVID relief/government spending passage marks
the end of an eventful month in Washington, DC.
However, Congress still has one outstanding
action on its plate before the 117th Congress
begins. Assuming President Trump acts on his
commitment to veto the Fiscal Year 2021 National
Defense Authorization Act (NDAA), Congress must
return prior to January 3 to hold a vote to
override the President’s veto.
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