A bipartisan group of 41 senators, led by senior Finance Committee member and former chairman Chuck Grassley (R-Iowa), Finance Committee member Bob Casey (D-Pa.) and Senator Marsha Blackburn (R-Tenn.), are calling for equitable tax treatment of pandemic aid provided to the still-struggling motorcoach and passenger vehicle industries.
Several pandemic relief measures provided tax-free grants to various industries, including small businesses, restaurants and entertainment venues to help them weather the economic impacts of the pandemic. However, grants provided through the Coronavirus Economic Relief for Transportation (CERT) Act were not afforded the same non-taxable status. As a result, the motorcoach, school bus and passenger vessel industries face financial obligations and bookkeeping challenges not shared by other industries that received similar assistance.
In a letter today to Finance Committee Chairman Ron Wyden (D-Ore.) and Ranking Member Mike Crapo (R-Idaho), the senators note that disparate tax treatment of pandemic aid issued under CERT and offer support in fixing the inequity.
“These industries provide essential transportation services to the public and need to remain in business. These businesses were some of the first to shut down in 2020 and will be among the last to fully recover. The CERTS Act grants, while extremely beneficial, only replaced about twenty percent of lost revenue from 2020. With the Delta variant leading many commuters and travelers to continue to stay at home, the economic impacts on these industries will be prolonged. Many operators do not expect to return to “normal” business until sometime in 2023. Requiring these struggling businesses to pay back a large portion of these emergency grants in taxes will further delay their recovery,” the senators wrote.
Joining Grassley, Casey and Blackburn are Sens. Richard Blumenthal (D-Conn.), Steve Daines (R-Mont.), Chris Van Hollen (D-Md.), Susan Collins (R-Maine), Jeanne Shaheen (D-N.H.), Mike Rounds (R-S.D.), Jack Reed (D-R.I.), Roy Blunt (R-Mo.), Alex Padilla (D-Calif.), Joni Ernst (R-Iowa), Cory Booker (D-N.J.), Roger Wicker (R-Miss.), Maggie Hassan (D-N.H.), Deb Fischer (R-Neb.), Amy Klobuchar (D-Minn.), Bill Hagerty (R-Tenn.), Jacky Rosen (D-Nev.), Todd Young (R-Ind.), Elizabeth Warren (D-Mass.), Thom Tillis (R-N.C.), Tina Smith (D-Minn.), Cynthia Lummis (R-Wyo.), Gary Peters (D-Mich.), Marco Rubio (R-Fla.), Chris Murphy (D-Conn.), Richard Burr (R-N.C.), Angus King (I-Maine), Lindsey Graham (R-S.C.), Ed Markey (D-Mass.), Debbie Stabenow (D-Mich.), Mazie Hirono (D-Hawaii), Mark Warner (D-Va.), Tammy Duckworth (D-Ill.), Tim Kaine (D-Va.), Mark Kelly (D-Ariz.), Robert Menendez (D-N.J.), Jeff Merkley (D-Ore.) and Chris Coons (D-Del.).
Full text of the letter follows:
Dear Chairman Wyden and Ranking Member Crapo:
The motorcoach, school bus, and passenger vessel industries have been devastated by the COVID-19 pandemic. Many of these companies are still struggling to get back to business as normal as the coronavirus is still limiting travel and entertainment opportunities. The December 2020 COVID relief package through the Coronavirus Economic Relief for Transportation Services (CERTS) Act provided invaluable support to these industries and their workers. However, when this provision was enacted, it failed to afford grants under the CERTS program the same tax treatment as other pandemic business assistance programs.
The Paycheck Protection Program (PPP), Shuttered Venue Operators Grant (SVOG), and the Restaurant Revitalization Fund (RRF) grants were all made non-taxable while all related business expenses remain fully deductible. However, the CERTS Act grants are taxable. We know that the Senate Finance Committee would have worked to provide similar tax treatment for this program if the matter was brought to the Committee’s attention at the time. These funds were intended to be emergency relief and should be treated the same as other coronavirus relief funds, which are exempt from tax while related business expenses remain deductible. This clarification would help simplify tax compliance for these industries, many of which are small and family businesses, as well as provide parity with other industries hard hit by the pandemic.
These industries provide essential transportation services to the public and need to remain in business. These businesses were some of the first to shut down in 2020 and will be among the last to fully recover. The CERTS Act grants, while extremely beneficial, only replaced about twenty percent of lost revenue from 2020. With the Delta variant leading many commuters and travelers to continue to stay at home, the economic impacts on these industries will be prolonged. Many operators do not expect to return to “normal” business until sometime in 2023. Requiring these struggling businesses to pay back a large portion of these emergency grants in taxes will further delay their recovery.
Thank you for your time and attention to helping these hard-hit industries recover from the pandemic by exempting CERTS grant funding from taxable income on the same terms as similar programs. We look forward to working with you to fix this inequity.
Sincerely,
Original source can be found here.
