Updates and Resources for Business

Last week the Equal Employment Opportunity Commission (EEOC) released new guidance on the extent to which employers can require employees to get the COVID-19 vaccine. Essentially, employers can require mandatory vaccines, as long they allow employees to receive the vaccine from a third party that does not have a contract with the employer and allow for reasonable accommodations under the ADA and Title VII.

Read more.

This week NAMM President and CEO Joe Lamond urged Congress to pass bipartisan relief legislation such as the "Emergency Coronavirus Relief Act of 2020" and the "Bipartisan State and Local Support and Small Business Protection Act of 2020" before the holiday recess. Mr. Lamond stressed that the proposed $908 billion emergency assistance for American families, workers, and small businesses is necessary to prevent additional music-related manufacturers and retail stores, and live event venues and workers from going out of business during this historical and unprecedented health and financial crisis that will likely extend through the end of2021.

Read the full letter.

This week, NAMM joined almost 700 hundred state and national associations as signatory to a 12/3 letter calling for Congress to overturn its earlier ruling, regarding PPP loan expense deductibility.

As posted on 11/23 below, in November, the U.S. Treasury Department and Internal Revenue Service (IRS) reiterated guidance issued late summer (Notice 2020-32) clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. The guidance states that since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible, resulting in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket. The coalition’s recent letter calls on Congress to include a fix to clarify that recipients of forgivable PPP loans can claim normal business expense deductions in any end-of-year legislation.

A summary of the bipartisan COVID relief package was released earlier this week which said that “business expenses paid for with the proceeds of PPP loans are tax deductible, consistent with Congressional intent in the CARES Act” however, we understand that Secretary Mnuchin’s offer to Democratic leadership did not include this provision. Negotiations continue.

NAMM will continue to monitor this issue closely and will post actionable updates and calls to action as needed here.

Yesterday, the COVID Relief Now (CRN) Coalition launched a new ad “Economic Relief Can’t Wait” which calls on Congress to pass another economic relief package during the current lame duck session. Watch the ad currently running across digital platforms including Twitter, YouTube, Google, connected TVs, and other online sites.

As a coalition member, NAMM will continue to work with all interested parties to encourage Congress to reach a bipartisan, bicameral agreement on needed COVID relief. We will post actionable updates and calls to action as needed here.

The U.S. Treasury Department and Internal Revenue Service (IRS) recently reiterated guidance issued late summer (Notice 2020-32) clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. The guidance states that since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible, resulting in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket.

In response, Senate Finance Chairman Charles E. Grassley, R-Iowa, and ranking Democrat Ron Wyden of Oregon released a strongly worded joint statement on November 19 that called on Treasury to reconsider. When Congress created the Paycheck Protection Program, lawmakers intended for businesses to be able to have their loans forgiven and still expense the loan money, the senators said.

Further, the IRS "doubled down" on this harmful ruling, the two said, by issuing the guidance earlier this week that will accelerate a loan recipient's tax liability. The new ruling requires firms expecting to have their loans forgiven at a later date to not expense any of the loan funds in tax filings made prior to actual forgiveness. Senators Grassley and Wyden added that they hope to clarify the law "in any end-of-year legislation.

In the House, leaders of the chamber’s tax-writing panel, the Ways and Means Committee, have raised similar concerns about the loan deductibility guidance. Congress returns to Washington, DC next week to address a number of outstanding issues before its anticipated adjournment in mid to late December.