The Out of Home Advertising Association of America (OAAA) continues to push Congress and the Administration to help businesses injured by government restrictions on mobility.
This week, OAAA is urging Congress to clarify that business expenses paid for with small-business stimulus loans are deductible.
On April 30, the Internal Revenue Service (IRS) issued a Notice that said “no deduction is allowed under the IRS Code for an expense that is otherwise deductible if the expense results in forgiveness of a covered loan” via federal stimulus relief (the CARES Act).
Leaders of tax committees in Congress (Senator Chuck Grassley of Iowa and Richard Neal of Massachusetts) have said the recent IRS Notice contradicts the intent of Congress.
OAAA and other pro-business groups pointed out that legislative text of stimulus legislation signed by the President said that loan forgiveness available to Paycheck Protection Program (PPP) recipients “shall be excluded from gross income.”
“The impact of this latest IRS ruling is significant,” said a letter to Congress signed by business supporters including OAAA. “The effect will be to substantially increase the tax liability of Paycheck Protection Program loan recipients at the worst possible time.”