U.S. Rep. John Curtis (R-UT) expressed concern about a recent decision by the U.S. Treasury Department to treat Paycheck Protection Program (PPP) expenses as income.
In a Nov. 24 letter Rep. Curtis and his colleague U.S. Rep. Chip Roy (R-TX) sent to U.S. Treasury Secretary Steven Mnuchin, the lawmakers said Treasury’s decision effectively surprised small businesses “with a tax bill as punishment for taking government assistance.”
“This comes with significant unintended consequences and could be taken by many that the federal government cannot be trusted to provide help without strings attached in a time of great need such as a global pandemic,” Reps. Curtis and Roy wrote in the letter.
PPP loans, which were authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, were designed to provide immediate federal assistance to America’s struggling small businesses during the onset of the COVID-19 outbreak, the members wrote, noting that small business owners used the forgivable loans to continue operating and employing people while the nation considered how to respond to the pandemic.
“Treasury’s decision to treat eligible PPP expenses as income is especially problematic because small businesses throughout many industries continue to struggle to survive,” Rep. Curtis and his colleague wrote. “Without sustainable revenue streams, especially as we enter the winter months, businesses could default on these tax payments or permanently close their doors.”
The lawmakers urged Secretary Mnuchin to reverse the department’s decision and to work with Congress to resolve the issue.
“This is also a belief held by the leaders of the Senate Finance Committee and the chair of the House Ways and Means Committee, in addition to prominent members of Congress from both parties, which underscores the importance of finding a workable solution,” they wrote.