In a letter to the U.S. Senate, SMACNA expressed its deep concern that the definitions put forth by regulatory agencies interpreting the legislation surrounding Small Business Administration (SBA) loans to small businesses do not expressly include the legislation’s original intent of flexible Paycheck Protection Program (PPP) terms for borrowers and lenders. This oversight would be corrected if Congress passes S. 3833 or S. 3612. S. 3833, a bill to extend the loan forgiveness period for the PPP and other purposes, is sponsored by Senators Rubio (R-FL) and Cardin (D-MD) with 9 bipartisan cosponsors. S. 3833 reflects many of the concerns SMACNA’s anxious PPP loan recipients have expressed over recent weeks.
The bipartisan Senate bill would also allow business owners to extend the loan forgiveness period for PPP loans, use the loan funds to buy personal protective equipment for staff, and to pay for virus mitigation measures to comply with public health guidelines, like sneeze guards, HVAC ventilation system upgrades, and even outdoor patios. These items were not specified in the enacted bills but would be considered allowable overhead expenses as borrowers seek forgiveness for PPP loans.
SMACNA endorses S. 3612, The Small Business Expense Protection Act, bipartisan legislation introduced by Senators Cornyn (R-TX), Wyden (D-OR), Grassley (R-IA), and twenty other bipartisan cosponsors. S. 3612 would clarify the Small Business Administration’s Paycheck Protection Program IRS guidance so small businesses can deduct expenses paid with a forgiven PPP loan from their taxes. The congressional intent of the PPP program was to keep workers connected to their jobs and to ease the financial burden on small businesses so they could weather this pandemic and borrowers should not be penalized by new taxes because they followed initial guidance for the important PPP loans. Congress was clear in passing the PPP, its intention was not to give assistance with one hand and take away ordinary business deductions with the other. S. 3612, when enacted, would ensure small businesses suffering financial harm through no fault of their own aren’t hit with an unexpected tax bill when they receive and utilize much-needed federal PPP relief.
Both Senate bills would also extend loan terms beyond two years and ensure full access to payroll tax deferment for PPP loan recipients. This is an important and apparently necessary clarification from Congress that SMACNA has been advocating for since the Paycheck Protection Program passed into law.