In response from inquiries and regional dealer associations about the potential loss of tax-deductible status for Paycheck Protection Program expenses, the National Automobile Dealers Association has joined more than 180 other trade associations and advocacy groups in requesting that Congress clarify that expenses related to forgiven PPP loans are tax-deductible.
Recently, the Treasury Department interpreted that forgiven PPP loans and their related expenses would not be tax-deductible, seemingly undermining the expressed goals of both Democrats and Republicans in Congress who worked on the program authorized by the CARES Act.
The Democratic-controlled House passed the HEROES Act in May, which, in addition to providing more than $3 trillion in additional stimulus spending, would have explicitly provided full deductibility for PPP loan expenses. While the Republican-led Senate has not taken up the HEROES Act, and remains in discussions with House leaders and the Trump administration, GOP leaders are also said to be supportive of making PPP expenses tax deductible.
The letter that NADA joined urges Congressional leaders from both chambers, and both parties, to include full PPP deductibility in the next stimulus bill, which would override any Treasury Department interpretation.
We appreciate NADA’s hard work on securing a legislative fix in Congress before the end of 2020. We will provide updates on any additional stimulus bills that pass both chambers of Congress, along with additional details on the tax-deductible status of PPP-related expenses.Download Bulletin PDF