by Hunter Dawkins
After the Bill S. 3612 was introduced to the United States Senate Finance Committee on May 5, Mississippi’s Senior Senator Roger Wicker decided to join on as a co-sponsor of this legislation.
Shortly following, the title emerged from this bill as the Small Business Expense Protection Act of 2020 where the legislation would clarify for purposes of the Internal Revenue Code of 1986 that receipt of coronavirus assistance does not affect the tax treatment of ordinary business expenses if brought to law.
Small businesses that received the Paycheck Protection Program (PPP) loans urgently need to have S. 3612 included in the Senate Majority Leader Mitch McConnell’s proposal for the next stimulus bill. Senator John Cornyn, R-Texas, is leading the way to get the bill (which he authored) included.
The bill would ensure that small businesses can continue to deduct their payroll expenses, rent, mortgage interest and utilities, even if those costs were supported by PPP loans. Without this bill, the Treasury Department intends to tax those expenses, which would effectively take away the money that Congress intended to provide in forgivable loans for small businesses. The legislation is not a request for any additional stimulus funds, but rather a simple correction of erroneous tax policy on the original PPP loans.
The CARES Act made available PPP loans for nonprofits with fewer than 500 employees per Small Business Administration affiliation rules.
On June 15, the Mississippi Senators; including Cindy Hyde Smith signed a letter that advocates easing paperwork requirements for small businesses seeking loan forgiveness under the Paycheck Protection Program (PPP).
“We appreciate the interest in appropriately auditing the use of government money. However, the loan forgiveness application – which understandably needs more information for loans worth significantly more than $250,000 – is three times longer than the original application for the PPP,” the Senators said.