U.S. Rep. Dan Newhouse (R-WA) seeks to have a bipartisan bill he introduced earlier this year that would provide relief to small businesses utilizing Paycheck Protection Program (PPP) funding included in a forthcoming pandemic-relief measure being debated in Congress.
The Fixing the Income Ramifications for Small Businesses and Tax Relief (FIRST) Act, H.R. 6884, which Rep. Newhouse sponsored in May with cosponsor U.S. Rep. Dean Phillips (D-MN), would amend the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide that tax deductions for ordinary business expenses will not be affected by the exclusion from gross income of amounts related to loan forgiveness received in response to COVID-19, according to the congressional record summary.
If enacted, the bill also would reverse guidance issued this year by the Internal Revenue Service (IRS) that prevents companies from taking tax deductions for business expenses, including wages, rent, certain interest payments, and utilities, if the spending comes from PPP loans, according to a July 28 letter Reps. Newhouse and Phillips sent to U.S. House Speaker Nancy Pelosi (D-CA) and U.S. House Minority Leader Kevin McCarthy (R-CA).
“To reverse this flawed rulemaking, Congress must ensure small businesses can maximize their PPP dollars,” the members wrote. “We can do so by passing legislation like H.R. 6884, the FIRST Act, which will allow businesses to deduct forgiven expenses paid with PPP funds. We [respectfully] request the inclusion of legislation like the FIRST Act in any further COVID-19 relief package.”
Among the lawmakers who also joined Rep. Newhouse in signing the letter were U.S. Reps. Brian Fitzpatrick (R-PA), Cathy McMorris Rodgers (R-WA), Troy Balderson (R-OH), Billy Long (R-MO), and Bill Johnson (R-OH).