2020 12 3 ppp deductibility coalition letter final


December 03, 2020


December 3, 2020

The Honorable Nancy Pelosi The Honorable Mitch McConnell
Speaker, House of Representatives Majority Leader
United States Capitol United States Senate
Washington, DC 20515 Washington, DC 20510

The Honorable Kevin McCarthy The Honorable Charles Schumer
Minority Leader, House of Representatives Democratic Leader
United State Capitol United States Senate
Washington, DC 20515 Washington, DC 20510

Dear Speaker Pelosi and Leaders McConnell, McCarthy, and Schumer:

We, the undersigned organizations, representing millions of businesses who employ tens of millions of American workers, urge Congress to enact legislation before the end of the year that includes a technical correction addressing the tax treatment of loan forgiveness under the Paycheck Protection Program (PPP). At the onset of the COVID-19 pandemic, Congress responded with speed, cooperation, and an eye to preventing the worst potential economic outcomes. We ask that you bring that same spirit of urgency and cooperation before the end of this session to prevent an avoidable catastrophe for millions of small businesses that, without Congressional action, will face a surprising, and, in many cases, insurmountable tax bill next year.

One of the most effective economic relief measures for our members was the PPP, passed as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The terms of the PPP are simple: if qualifying small businesses use a federally-guaranteed loan to pay their employees and cover certain non-payroll expenses, the loan will be forgiven. From April 3, when the program launched, through August 8, when its authorization expired, the Small Business Administration (SBA) guaranteed $525 billion in PPP loans to 5.2 million qualifying small businesses nationwide, preserving tens of millions of paychecks for their employees as the pandemic spread throughout the country.

Included in the CARES Act was a provision stating that any portion of a PPP loan that qualified for loan forgiveness “shall be excluded from gross income” for tax purposes. This tax-free treatment of any forgiven loan amount was a key provision in the law and featured prominently in the debate leading up to and following the legislation’s enactment.

Despite Congress’s clear intent, the Internal Revenue Service (IRS) issued Notice 2020-32, which specified that “no deduction is allowed under the Internal Revenue Code…if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the [CARES Act].” The effect of this ruling is to transform tax-free loan forgiveness into taxable income, raising the specter of a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020.

Additionally, the IRS recently issued Revenue Ruling 2020-27, stating that expenses funded through a PPP loan are not deductible for 2020 if “the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period, even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year” [emphasis added].

Since the IRS issued Notice 2020-32, Congress has signaled that it intends to reverse the ruling. The Democratic and Republican Chairs of the House Ways and Means and Senate Finance Committees issued public statements saying that the IRS Notice, and, more recently, the IRS Revenue Ruling, is flawed and contrary to Congressional intent. In addition, a provision to overturn Notice 2020-32 was included in the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act that passed the House of Representatives in May.

The most recent IRS Revenue Ruling creates a renewed sense of urgency for Congress to address this pivotal issue before the end of the year. Allowing the IRS position to remain unchallenged will result in a significant tax increase on small business owners already suffering from the effects of COVID-19 shutdowns. This tax will hit small business owners after their PPP loan has already been spent, and just as many states are re-imposing mandatory closures of thousands of businesses in the face of spiking numbers of COVID-19 cases.

Many PPP loan recipients retained employees on their payrolls, even when there was little to no work to perform, in compliance with the intent of the program to keep people employed and off the unemployment rolls. The IRS changed the rules after businesses took out PPP loans, and business owners are now being asked to pay what amounts to a surtax on their workforce.

Without Congressional action, businesses will face an unexpected tax bill when they file their taxes for 2020, as they continue to struggle with government mandated shutdowns or slowdowns. Many of those businesses will close and never re-open. This senseless tax policy stands both the letter and spirit of the PPP on its head.

For all these reasons, the undersigned business organizations urge you to act before the end of 2020 on this important matter.


National Trade Associations

Associated General Contractors of America

Air Conditioning Contractors of America (ACCA)

AMAC Action

Ambulatory Surgery Center Association


America's SBDC

American Academy of Dermatology Association

American Academy of Family Physicians

American Academy of Pediatric Dentistry

American Academy of Podiatric Practice Management

American Apparel & Footwear Association (AAFA)

American Association Of Advertising Agencies

American Association of Neurological Surgeons

American Bakers Association

American College of Gastroenterology

American College of Osteopathic Family Physicians

American Cotton Producers

American Cotton Shippers Association

American Council of Engineering Companies

American Council of Independent Laboratories

American Dental Association

American Down and Feather Council

American Farm Bureau Federation

American Feed Industry Association

American Horse Council

American Institute of Architects (AIA)

American Institute of CPAs

American International Automobile Dealers

Association American Lighting Association

American Mold Builders Association

American National CattleWomen, Inc.

American Olive Oil Producers Association

American Optometric Association

American Podiatric Medical Association

American Road & Transportation Builders Association

American Seed Trade Association

American Sheep Industry

American Society for Radiation Oncology

American Society for Surgery of the Hand

American Society of Plastic Surgeons

American Society of Travel Advisors

American Soybean Association

American Subcontractors Association

American Supply Association

American Veterinary Medical Association


Asian American Hotel Owners Association

Associated Builders and Contractors

Associated Equipment Distributors

Association of Equipment Manufacturers

Association of Fund-Raising Distributors and Suppliers

Association of Marina Industries

Association of the Wall and Ceiling Industry

Atlantic Intracoastal Waterway Association

Auto Care Association

Brewers Association

Building Service Contractors Association

International Business Solutions Association

CCIM Institute

Cellulose Insulation Manufacturers Association

Certified American Grown

Chemical Fabrics and Film Association

Coalition of Franchisee Associations

Congress of Neurological Surgeons

Convenience Distribution Association

Cotton Growers Warehouse Association

Cottonseed and Feed Association

Council of Fashion Designers of America (CFDA)

Customized Logistics and Delivery Association

Distilled Spirits Council of the United States

EPS Industry Alliance

Family Business Coalition

Farm Credit Council

FCA International FEUSA

Financial Executives International

Fire Suppression Systems Association (FSSA)

FPDA - Motion & Control Network


Glass Packaging Institute (GPI)

Global Business Travel Association

Global Cold Chain Alliance

Greeting Card Association

Heating, Air-conditioning, & Refrigeration Distributors

International Independent Bakers Association

Independent Community Bankers of America

Independent Electrical Contractors

Independent Insurance Agents and Brokers of America

Independent Office Products & Furniture Dealers Association

Independent Professional Seed Association

Industrial Fasteners Institute

Institute of Real Estate Management

Institute of Scrap Recycling Industries, Inc.

International Association of Movers (IAM)

International Association of Plastics Distribution

International Caterers Association

International Council of Shopping Centers

International Dairy Foods Association

International Door Association

International Engraved Graphics Association

International Flight Services Association

International Foodservice Distributors Association

International Franchise Association

International Housewares Association

International Warehouse Logistics Association

ISD - International Sealing Distribution Association

Job Creators Network

Juice Products Association

Manufactured Housing Institute

Manufacturer & Business Association

Marine Retailers Association of the Americas

Material Handling Equipment Distributors Association

Metals Service Center Institute


National Apartment Association

National Association for the Self-Employed

National Association of Chain Drug Stores

National Association of Electrical Distributors (NAED)

National Association of Flour Distributors

National Association of Landscape Professionals

National Association of Manufacturers

National Association of Professional Insurance Agents


National Association of Social Workers

National Association of Wheat Growers

National Association of Wholesaler-Distributors

National Association of Women Business Owners

National Automatic Merchandising Association (NAMA)

National Automobile Dealers Association

National Beer Wholesalers Association

National Candle Association

National Cattlemen's Beef Association

National Community Pharmacists Association

National Confectioners Association

National Cotton Council

National Cotton Ginners Association

National Cottonseed Products Association

National Council of Agricultural Employers

National Council of Chain Restaurants

National Council of Farmer Cooperatives

National Council of Textile Organizations

National Electrical Contractors Association

National Franchisee Association

National Funeral Directors Association

National Limousine Association

National Marine Distributors Association

National Marine Manufacturers Association

National Mining Association

National Multifamily Housing Council

National Newspaper Association

National Office Products Alliance

National Onion Association

National Pasta Association

National Peach Council

National Pecan Shellers Association

National Potato Council

National Propane Gas Association

National Ready Mixed Concrete Association

National Retail Federation

National Roofing Contractors Association

National RV Dealers Assoc (RVDA)

National Small Business Association

National Stone, Sand, and Gravel Association

National Tooling and Machining Association

National Waste & Recycling Association

National Watermelon Association


News Media Alliance


North American Association of Food Equipment Manufacturers (NAFEM)

North American Die Casting Association

NTCA-The Rural Broadband Association

Office Furniture Dealers Alliance

Out of Home Advertising Association of America

Outdoor Power Equipment and Engine Service Association

Pet Industry Distributors Association

Petroleum Equipment Institute (PEI)

Plumbing-Heating-Cooling Contractors—National Association

Portland Cement Association

Precision Machined Products Association

Precision Metalforming Association

Pressure Sensitive Tape Council


United Alliance Professional Beauty Association

Professional Electrical Apparatus Reconditioning League


Land Institute

Retail Bakers of America

Retail Packaging Association (RPA)


Roof Coatings Manufacturers Association

S Corporation Association

Secondary Materials and Recycled Textiles Assoc.

SHDA - Security Hardware Distributors Association

Small Business & Entrepreneurship Council

Small Business Roundtable

Society of American Florists

Society of Industrial and Office REALTORS®

South East Dairy Farmers Association

Southeastern Lumber Manufacturers Association (SLMA)

Spray Polyurethane Foam Alliance

SPRI, Inc.

Structural Insulated Panel Association

The Airforwarders Association

The Association for Dressings and Sauces

The Association for Hose & Accessories Distribution (NAHAD)

The Design-Build Institute of America

The Hardwood Federation

The Sheet Metal and Air Conditioning Contractors National Association (SMACNA)

The Society for Maintenance and Reliability Professionals

The Transportation Alliance

The Vinegar Institute

The Wholesale Florist and Florist Supplier Association (WF&FSA)

Tile Roofing Industry Alliance

Tire Industry Association

Truck Renting and Leasing Association

U.S. Apple Association

U.S. Chamber of Commerce

U.S. Superyacht Association

United Fresh Produce Association

United Veterinary Services Assoc.

US Rice Producers Association

USA Farmers

Western Equipment Dealers Association

Western Growers

Wine & Spirits Wholesalers of America

Wine Institute


Winegrape Growers of America

Wireless Internet Services Providers Association (WISPA)

State/Regional Affiliates


Northeast Dairy Farmers Cooperatives

Printing Industry Association of the South

Pacific Seed Association

Pacific Printing Industries Association (PPI)

Printing Industry Midwest

Southern Nursery Association, Inc.


Alabama AGC

Alabama Nursery & Landscape Association

Alabama Propane Gas Association

Alabama Restaurant & Hospitality Alliance

Central Alabama Chapter Independent Electrical Contractors


Arkansas Hospitality Association

Arkansas Propane Gas Association


Alaska CHRR

Pacific Propane Gas Association


Arizona Builders Alliance

Arizona Chapter of the Associated General Contractors of America

Arizona Nursery Association

Arizona Propane Gas Association

Arizona Restaurant Association


ABC San Diego

Associated Builders and Contractors Central California Chapter

Associated Builders and Contractors Northern California Chapter

Associated Builders and Contractors Southern California Chapter

Associated General Contractors of America, San Diego Chapter

California Agricultural Irrigation Association

California Alfalfa and Forage Association

California Association of Wheat Growers

California Bean Shippers Association

California Cattlemen's Association

California Cut Flower Commission

California Fresh Fruit Association

California Grain & Feed Association

California Landscape Contractors Association

California Pork Producers Association

California Restaurant Association

California Seed Association

California State Beekeepers Association

California State Floral Association

California Warehouse Assoc.

Family Winemakers of California

Grower-Shipper Association of Santa Barbara & San Luis Obispo Counties

Monterey County Farm Bureau (CA)

Pacific Egg & Poultry Association

Pesticide Applicators Professional Association


Plant California Alliance

Plumbing Heating Cooling Contractors of California

San Diego County Farm Bureau

Sweetpotato Council of California

Ventura County Agricultural Association

Western Propane Gas Association


AGC Colorado

Colorado Association for Viticulture & Enology (CAVE) Colorado Cattlemen's Association

Colorado Livestock Association

Colorado Nursery and Greenhouse Association

Colorado Podiatric Medical Assn. DBA Colorado Foot & Ankle Society Colorado Propane Gas Association

Colorado Restaurant Association IEC Southern Colorado Chapter


Connecticut Restaurant Association Propane Gas Association of New England

District of Columbia


Associated Builders and Contractors of Metro Washington

Restaurant Association of Metropolitan Washington


ABC Delaware

DE Nursery & Landscape Association

Delaware Contractors Association

Delaware Restaurant Association

Graphic Arts Association


AGC Florida East Coast Chapter

Central Florida Chapter Associated Builders and Contractors, Inc.

Executives' Association of Greater Miami

Florida Cattlemen's Association

Florida Citrus Mutual

Florida Nursery, Growers and Landscape Association

Florida Podiatric Medical Association

Florida Propane Gas Association

Florida Restaurant & Lodging Association

Independent Electrical Contractors Assoc-FECC

Independent Electrical Contractors Florida West Coast Chapter

Marine Industries Association of Palm Beach County, Inc.

Marine Industry Association of Central Florida, Inc.

Miami Marine Council

The South Florida AGC


Associated Builders and Contractors of Georgia, Inc.

Atlanta Chapter, Independent Electrical Contractors, Inc.

Georgia Green Industry Association

Georgia Podiatric Medical Association

Georgia Propane Gas Association

Georgia Restaurant Association

Georgia Urban Ag Council

Independent Electrical Contractors, Georgia Chapter


Printing & Imaging Association of Georgia


General Contractors Association of Hawaii

General Contractors Labor Association of Hawaii

Hawaii Cattlemen's Council

Hawaii Restaurant Association

Pacific Propane Gas Association

Retail Merchants of Hawaii


Idaho Dairymen's Association

Idaho Lodging & Restaurant Association

Idaho Nursery and Landscape Association

Idaho Podiatric Medical Association

Idaho Potato Commission

Idaho Retailers Association

Rocky Mountain Propane Gas Association


Central Illinois Builders of AGC

Illinois Grape Growers and Vintners Alliance

Illinois Green Industry Association

Illinois Landscape Contractors Association

Illinois Propane Gas Association

Illinois Restaurant Association

Midwest Independent Electrical Contractors (IEC) Association


Associated Builders and Contractors of Indiana/Kentucky

IEC Indy

Indiana Beef Cattle Association

Indiana Nursery & Landscape Association Inc

Indiana Propane Gas Association

Indiana Restaurant Association

Indianapolis Landscape Association

Midwest Independent Electrical Contractors (IEC) Association


Associated Builders and Contractors of Iowa, Inc.

Iowa Cattlemen's Association

Iowa Propane Gas Association

Iowa Restaurant Association Master Builders of Iowa

Plumbing, Heating Cooling Contractors of Iowa


Associated Builders & Contractors, Inc. Heart of America Chapter

Kansas Livestock Association

Kansas City AGC

Kansas Restaurant & Hospitality Association

Propane Marketers Association of Kansas


Associated Builders and Contractors of Indiana/Kentucky

AGC of Western Kentucky

Associated General Contractors of Kentucky

Kentucky Auto & Truck Recyclers Association

Kentucky Cattlemen's Association

Kentucky Propane Gas Association

Kentucky Restaurant Association

Kentucky Retail Federation


Louisiana Propane Gas Association

Louisiana Retailers Association

Louisiana Restaurant Association

Louisiana Society of Association Executives

Plumbing-Heating-Cooling Contractors of Louisiana


AGC Maine

Maine Landscape and Nursery

Association Maine Potato Board

Maine Restaurant Association

Propane Gas Association of New England

Retail Association of Maine


IEC Chesapeake, Inc.

Maryland Cattlemen's Association

Maryland Nursery, Landscape, and Greenhouse Association, Inc.

Maryland AGC

Maryland Wineries Association

Mid-Atlantic Propane Gas Association


Restaurant Association of Maryland


AGC of Massachusetts

Massachusetts Marine Trades Association

Massachusetts Nursery and Landscape Association

Massachusetts Restaurant Association

Propane Gas Association of New England

Retailers Association of MA


ABC Greater Michigan Chapter ABC Michigan

AGC of Michigan

Michigan Boating Industries Association Michigan Farm Bureau

Michigan Podiatric Medical Association

Michigan Propane Gas Association

Michigan Restaurant Association

Michigan Retailers Association

Michigan State Horticultural Society

Potato Growers of Michigan, Inc.



Associated Builders and Contractors MN/ND

Minnesota Nursery & Landscape Association

Minnesota Propane Gas Association

Minnesota Restaurant Association

Minnesota Retailers Association


Mississippi Cattlemen's Association

Mississippi Hospitality & Restaurant Association

Mississippi Propane Gas Association


AGC of Missouri

Associated Builders & Contractors, Inc. Heart of America Chapter

IEC of Greater St. Louis

Kansas City AGC

Lake of the Ozarks Marine Dealers Association

Missouri Propane Gas Association

Missouri Restaurant Association

Missouri Retailers Association

Missouri Tire Industry Association


Montana Contractors Association

Montana Nursery & Landscape Association

Montana Podiatric Medical Association

Montana Restaurant Association

Montana Stockgrowers Association

Rocky Mountain Propane Gas Association


AGC-Nebraska Building Chapter

Nebraska Cattlemen

Nebraska Propane Gas Association

Nebraska Restaurant Association


Associated Builders and Contractors, Nevada Chapter

Nevada Propane Dealers Associations

Nevada Restaurant Association

Retail Association Of Nevada

New Hampshire

Associated Builders & Contractors NH/VT Chapter

Associated General Contractors of NH

New Hampshire Lodging & Restaurant Association

New Hampshire Retail Association

Propane Gas Association of New England

New Jersey

Graphic Arts Association

New Jersey Landscape Contractors Association

New Jersey Propane Gas Association

New Jersey Restaurant Association

New Mexico


Associated Builders and Contractors New Mexico

New Mexico Propane Gas Association

New Mexico Restaurant Association

NM Retailers Association

New York

Associated General Contractors of New York State

New York Farm Bureau

New York Propane Gas Association

New York State Association of Plumbing, Heating, Cooling Contractors

New York State Restaurant Association

New York State Vegetable Growers Association

NY Wine Industry Association

North Dakota

Associated Builders and Contractors MN/ND

North Dakota Hospitality Association

North Dakota Podiatric Medical Association

North Dakota Propane Gas Association

North Dakota Retail and Petroleum Marketers Association

North Carolina

NC Foot & Ankle Society

NC Nursery & Landscape Association

North Carolina Cattlemen's Association

North Carolina Potato Association

North Carolina Propane Gas Association

North Carolina Restaurant & Lodging Association

Printing Industry of the Carolinas, Inc.


ABC Central Ohio

Boating Association of Ohio

Graphic Media Alliance

IEC Northern Ohio

Lake Erie Marine Trades Association

Ohio Cattlemen's Association

Ohio Landscape Association

Ohio Propane Gas Association

Ohio Restaurant Association

Plumbing-Heating-Cooling Contractors of Ohio

Southern Ohio Marine Trades Association


ABC of Oklahoma IEC-OKC

Oklahoma Cattlemen's Association

Oklahoma Propane Gas Association

Oklahoma Restaurant Association


ABC Pacific Northwest Chapter

Oregon Association of Nurseries

Oregon Cattlemen's Association

Oregon Dairy Farmers Association

Oregon Essential Oil Growers League

Oregon Restaurant Association

Oregon Seed League

Oregon Winegrowers Association

Pacific Propane Gas Association


Associated Builders & Contractors, Keystone Chapter

Associated Builders and Contractors of Western PA

Central Pennsylvania Chapter Independent Electrical Contractors

Constructors Association of Western Pennsylvania

General Building Contractors Association

Graphic Arts Association

IEC of Northwest Pennsylvania

PennAg Industries Association

Pennsylvania Propane Gas Association

Pennsylvania Restaurant & Lodging Association

Puerto Rico

Puerto Rico Restaurant Association

Rhode Island

Propane Gas Association of New England

Rhode Island Hospitality Association

Rhode Island Marine Trades Association

South Carolina

South Carolina Propane Gas Association

South Carolina Restaurant & Lodging Association

Printing Industry of the Carolinas, Inc.

South Dakota

AGC of South Dakota, Inc.

Associated General Contractors of South Dakota Building Chapter

South Dakota Petroleum & Propane Marketers Association

South Dakota Retailers Association

South Dakota Retailers Association Restaurant Division


Associated Builders and Contractors- Greater Tennessee Mid-South IEC

Tennessee Farm Winegrowers Alliance

Tennessee Hospitality Association

Tennessee Nursery & Landscape Association

Tennessee Podiatric Medical Association

Tennessee Propane Gas Association


AGC Houston

Associated Builders & Contractors of Southeast Texas

Associated Builders & Contractors of Texas Gulf Coast

Associated Builders & Contractors, Inc, Texas Mid Coast Chapter

Boating Trades Association of Texas

CenTex Independent Electrical Contractors IEC Fort Worth/Tarrant County

Print & Imaging Association of MidAmerica

RGV Chapter of IEC

Texas and Southwestern Cattle Raisers Association

Texas Cattle Feeders Association

Texas International Produce Association

Texas Nursery & Landscape Association

Texas Propane Gas Association

Texas Retailers Association (TRA)

Texas Restaurant Association

TEXO -The Construction Association


Associated Builders and Contractors of Utah

Rocky Mountain Propane Gas Association

Utah Cattlemen's Association

Utah Restaurant Association


Associated Builders & Contractors NH/VT Chapter

Propane Gas Association of New England

Vermont Chamber of Commerce


IEC Chesapeake, Inc.

Virginia Nursery & Landscape Association

Virginia Podiatric Medical Association

Virginia Propane Gas Association

Virginia Restaurant Lodging & Travel Association

Virginia Retail Federation


Associated Builders and Contractors of Western Washington

Pacific Propane Gas Association

Washington Cattle Feeders Association

Washington Cattlemen's Association

Washington Restaurant Association

Washington Retail Association

Washington State Nursery & Landscape Association

Washington State Potato Commission

Washington Wine Institute

Washington Winegrowers Association

West Virginia

West Virginia Hospitality & Travel Association

West Virginia Nursery & Landscape Association

West Virginia Propane Gas Association


Associated Builders and Contractors of Wisconsin Inc.

Associated General Contractors of Greater Milwaukee

Wisconsin Grocers Association

Wisconsin Landscape Contractors Association - Waukesha, WI

Wisconsin Marine Association

Wisconsin Potato & Vegetable Growers Association

Wisconsin Propane Gas Association

Wisconsin Restaurant Association


Rocky Mountain Propane Gas Association

Wyoming Lodging & Restaurant Association

Wyoming Stock Growers Association

2020 12 3 ppp deductibility coalition letter final