WASHINGTON, D.C. – Today, Reps. Dan Newhouse (R-WA) and Dean Phillips (D-MN) led a bipartisan letter to Speaker Nancy Pelosi and Leader Kevin McCarthy, urging the inclusion of provisions to ensure small businesses can maximize their funding from Paycheck Protection Program (PPP) in the next COVID-19 relief package.
In the letter, lawmakers request the inclusion of legislation like the FIRST Act, which would provide relief to small businesses across the country who are utilizing PPP funding by allowing them to deduct ordinary business expenses paid with PPP funds.
“Contrary to Congressional intent, the IRS issued guidance prohibiting companies from taking tax deductions for these expenses,” wrote the lawmakers. “As the House continues to discuss another round of legislation to support our constituents during the COVID-19 pandemic, we must address this important matter and reassert Congressional intent of the PPP. We respectively request the inclusion of legislation like the FIRST Act in any further COVID-19 package.”
On May 15, Rep. Newhouse introduced H.R. 6884, the FIRST Act, to allow businesses to deduct forgiven expenses paid with PPP funds. Rep. Phillips joined as a bipartisan cosponsor of the legislation.
The letter was signed by Reps. Dan Newhouse (R-WA), Dean Phillips (D-MN), Brian Fitzpatrick (R-PA), Jim Costa (D-CA), Jason Smith (R-MO), Gilbert R. Cisneros, Jr. (D-CA), Cathy McMorris Rodgers (R-WA), Troy Balderson (R-OH), Anthony Gonzales (R-OH), Brian Mast (R-FL), Rick Allen (R-GA), Rick Crawford (R-AR), Billy Long (R-MO), Dan Meuser (R-PA), and Bill Johnson (R-OH).
The bipartisan effort has gained support of the National Federation of Independent Business, an advocacy organization with small and independent business members across the United States:
“NFIB supports the efforts of Congressmen Newhouse and Phillips to restore Congressional intent, reverse problematic IRS guidance, and prevent backdoor tax increases and administrative burdens on small business owners. More than 70% of small business owners are ready to apply for forgiveness. After forgiveness is accomplished, if this issue is not resolved, a tax increase would be a blow to small business owners trying to recover from an unprecedented public health and economic crisis. As Congress works on this next legislative effort, we urge fixing this issue to avoid unintended consequences.” – Kevin Kuhlman, Vice President of Federal Government Relations, National Federation of Independent Business
The full text of the letter can be found HERE.