The U.S. House of Representatives and Senate on Monday passed the $ 900 billion Covid-19 bill that aims to give business travel operators access to a second round of federal loan programs to help meet ongoing virus-related demand. The bill requires President Donald Trump’s signature.
The Covid-19 aid programs are part of the federal government 2021 Consolidated Funds Act, an omnibus expense account. According to reports and several travel industry associations, the provisions of the legislation include not only supplier support, but also a move that will make all normal business meal expenses tax deductible in 2021 and 2022.
Trump in March had suggested To make more business meals tax deductible, but no action has been taken on this matter prior to the latest legislation. US tax laws have long allowed companies to deduct 50 percent of the cost of customer and most types of meals for employees from corporate taxes. However, Trump’s 2017 tax reform added the specification that such a deduction was only allowed for meals that were not “lavish or extravagant.” “”
The legislation contains several provisions to reduce the burden on suppliers that the industry and its organizations aim to achieve, including:
• An extension to the paycheck protection program that allowed smaller shipments to gain access to futile credit if they left employees on their payrolls. According to the US Travel Association, the latest iteration of PPP will allow $ 284 billion employees with 300 or fewer employees, who have had revenue of more than 25 percent year-over-year in each quarter in 2020, to access the loans available, provided they spend at least 60 percent of that on the payroll. Loans for most companies would be 2.5 times the total wage bill, but are capped at $ 2 million. Hotels however could access 3.5 times the total wage bill.
• Allowable non-billable costs for PPP recipients have increased and, according to the American Society of Travel Advisors, now include “supplier costs and investments in changes to facilities and personal protective equipment to operate safely.”
• Business expenses paid for with PPP loans are now also tax deductible, which clarifies the language in the EU Original Coronavirus Aid, Relief and Economic Security Act that sparked an argument with the Internal Revenue Service.
• $ 15 billion for the Treasury Department’s Payroll Support Program for airlines, which gives them access to credit to be used solely for payroll until March 31st. The shippers can also use the loans to reinstate workers laid off after the original PSP expired on September 30th. 2020 according to US Travel.
• $ 1.75 billion in grants to airports “to prevent, prepare for, or respond to Covid-19,” funds used solely for “operations, staff, cleaning and debt servicing costs,” according to US Travel should be.
• $ 1 billion for Amtrak to maintain service and prevent vacation days until March 31st.
The legislation does not protect against liability for companies that comply with the health and safety regulations of Covid-19 and whose employees or customers become infected with the virus. This is what Shane Downey, vice president of government and community relations for the Global Business Travel Association, said.
“We cannot stress enough how urgently this funding is needed or how much this action by Congress will fuel a global journey and economic recovery,” Downey said in a statement. “Against this background, we hope that Congress will soon tackle the necessary Covid-19 liability relief for companies at risk through no fault of their own.”
Otherwise, GBTA and other industry groups said they were satisfied with the massage of the legislation, but stressed the need for additional support in 2021.
“GBTA is excited to see Congress pass an aid package that will save jobs, speed Covid-19 testing and distribute vaccines, and help travel companies on the brink of bankruptcy,” Downey said.
“Fortunately, this package is widely viewed as a short-term ‘bridge’ through early 2021, and it is clear that the next Congress will pass additional relief legislation in the first quarter,” said Zane Kerby, ASTA President and CEO, in a statement. “Something is better than nothing, and we appreciate the freedom this bill gives the vast majority of our members. But the battle continues and will last until the travel agency sector is back to health.”
American Hotel & Lodging Association President and CEO Chip Rogers said in a statement that the association looks forward to working with Congress and the new administration on a longer term stimulus package that will ensure our industry survives and is well positioned to help the country recover economically once the public health threat subsides. “
Nicholas Calio, President and CEO of Airlines 4 America, said in a statement, “Our people are the backbone of the industry and our greatest resource, and airlines have done everything possible to protect their jobs. Now that our nation is on a recovery is aligned, it does. ” It is more important than ever to have our people at work and ready to help. “