Grassley, Casey and Blackburn lead 38 colleagues in bid to correct the tax treatment of pandemic assistance for the passenger vehicle industry

WASHINGTON – 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 fair tax treatment of pandemic assistance provided to the still struggling coach and passenger vehicle industries.

Several pandemic relief measures have provided tax-free subsidies to various industries, including small businesses, restaurants and entertainment venues to help them weather the economic impacts of the pandemic. However, the grants awarded by the Law on economic assistance for transport (CERT) against the coronavirus did not have the same non-taxable status. As a result, the coach, school bus, and passenger ship industries face financial obligations and bookkeeping challenges that are not shared by other industries that have received similar assistance.

In a letter today to Finance Committee Chairman Ron Wyden (D-Ore.)

“These industries provide essential transport services to the public and must remain in operation. These businesses were among the first to close in 2020 and will be among the last to make a full recovery. The CERTS law subsidies, while extremely beneficial, have only replaced about twenty percent of lost income as of 2020. The Delta variant causing many commuters and travelers to continue to stay at home, the economic impacts on these industries will be extended. Many operators do not expect a return to “normal” activity before 2023. Requiring these troubled companies to repay a large part of these emergency tax subsidies will further delay their recovery ”, the senators wrote.

Alongside Grassley, Casey, and Blackburn are the Senses. Richard Blumenthal (D-Conn.), Steve Daines (R-Mont.), Chris Van Hollen (D-Md.), Susan Collins (R-Maine), Jeanne Shaheen (DN. H.), Mike Rounds (RS. D.), Jack Reed (DR.I.), Roy Blunt (R-Mo.), Alex Padilla (D-Calif.), Joni Ernst (R-Iowa), Cory Booker (DN.J.), Roger Wicker (R-Miss.), Maggie Hassan (DN.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 (RN.C.), Tina Smith (D-Minn.), Cynthia Lummis (R-Wyo.), Gary Peters ( D-Mich.), Marco Rubio (R-Fla.), Chris Murphy (D-Conn.), Richard Burr (RN.C.), Angus King (I-Maine), Lindsey Graham (RS.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 (DN.J.), Jeff Merkley (D-Ore.) And Chris Coons (D-Del.).

Dear President Wyden and Crapo Ranking Member:

The coach, school bus and passenger ship industries have been devastated by the COVID-19 pandemic. Many of these businesses are still struggling to resume normal operations as the coronavirus still limits travel and entertainment opportunities. The December 2020 COVID relief program through the Coronavirus Economic Assistance for Transportation Services Act (CERTS) has provided invaluable support to these industries and their workers. However, when this provision was enacted, it did not give CERTS grants the same tax treatment as other pandemic business assistance programs.

The Paycheck Protection Program (PPP), Shuttered Venue Operators Grant (SVOG) and Restaurant Revitalization Fund (RRF) have all been made tax-free, while all related business expenses remain fully deductible. However, grants under the CERTS law are taxable. We know that the Senate Finance Committee would have worked to provide similar tax treatment to this program had the matter been brought to the attention of the Committee at the time. These funds were intended to be emergency relief and should be treated the same as other coronavirus relief funds, which are tax-exempt while related business expenses remain deductible. This clarification would help simplify tax compliance for these industries, many of which are small family businesses, as well as ensure parity with other industries hit hard by the pandemic.

These industries provide essential transport services to the public and must remain in operation. These businesses were among the first to close in 2020 and will be among the last to make a full recovery. The CERTS law subsidies, while extremely beneficial, have only replaced about twenty percent of lost income as of 2020. The Delta variant causing many commuters and travelers to continue to stay at home, the economic impacts on these industries will be extended. Many operators do not expect a return to “normal” activity before 2023. Requiring these troubled companies to repay a large part of these emergency tax subsidies will further delay their recovery.

Thank you for your time and attention in helping these hard-hit industries recover from the pandemic by exempting CERTS grants from taxable income on the same terms as similar programs. We look forward to working with you to correct this injustice.

Truly,


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