COVID-19 Relief, Omnibus Spending Package Win Approval

The last-minute deal includes additional funding for small businesses and tax extenders.

December 22, 2020

ALEXANDRIA, Va.—Congress passed a sweeping end-of-year package last night that includes a $1.4 trillion omnibus spending bill and $900 billon in COVID-19 relief. President Donald Trump is expected to sign the almost 6,000-page bill into law later today. There are several relevant provisions for the convenience store industry.

For small businesses, the end-of-year package includes additional funding and changes to the Paycheck Protection Program (PPP) that may be of interest to eligible convenience retailers. By reauthorizing unused funds and adding additional funding, the legislation provides $284.5 billion in PPP funding. Small businesses with fewer than 300 employees that can show a revenue reduction of 25% or greater and that have already taken a PPP loan may be eligible for a second draw of up to $2 million. The legislation also allows PPP loan recipients to deduct any business expenses paid using PPP funds from their 2020 taxes, reversing an Internal Revenue Service interpretation announced over the summer. There are also a number of other important updates related to the PPP and the Economic Injury Disaster Loan (EIDL) Advance Program:

  • Creates a simplified, one-page, forgiveness application for loans less than $150,000
  • Expands the list of eligible expenses to include things like software, HR and accounting needs, repairs to physical damage done during civil unrest not covered by insurance and expenses related to the purchase of PPE
  • Repeals the requirement that PPP borrowers deduct EIDL advance amounts from their forgiveness applications
  • Provides $20 billion to restart the EIDL advance grant program

In addition to the updates to the PPP and EIDL program, Congress is providing a five-year extension of the Work Opportunity Tax Credit and extending and expanding the Employee Retention Tax Credit.

The Employee Retention Tax Credit was created by the CARES Act and made available to businesses that did not take a PPP loan in an effort to prevent layoffs. Originally, if you averaged more than 100 full-time employees in 2019, you could only claim the credit against wages you continued to pay workers who were staying home. However, starting in January, the cut-off for having fewer than 100 employees to be able to claim the credit against wages earned by employees who were at work will be increased to 500 employees. The qualifying amount of year-over-year gross receipts reduction is lowered from 50% to 20%. The credit is increased from 50% of the covered wages to 70%, and the maximum per-employee creditable amount is increased from a cap of $10,000 total to $10,000 per quarter.

There are also a host of energy and environment related items including tax incentives and funding for efficiency programs:

  • One-year extension of the 50-cent per gallon tax credit for alternative fuels and alternative fuel mixtures and the alternative fuel infrastructure tax credit
  • Five-year extension of the tax used to fund the Oil Spill Liability Trust Fund, which is used to help pay for oil spills when the responsible party is unknown
  • One-year extension of the second-generation biofuel producer credit
  • Phase down of hydrofluorocarbons, which are greenhouse gases used in cooling systems
  • Funding for clean energy technology development
  • Extension of tax credits for wind and solar projects
  • Two-year extension of tax credits for carbon capture and sequestrations projects
  • Makes permanent tax incentive for energy efficiency improvements for commercial buildings, such as lighting, heating and ventilation upgrades
  • Extension of tax credits for fuel cell vehicles and installation of alternative fuel cell charging infrastructure

Additional provisions of interest to the industry include the following: 

  • $120 billion in extra unemployment insurance—the legislation restarts the pandemic unemployment compensation program, which will run from December 26 until March 14. The additional amount provided is reduced from the $600 per week under the original program to $300 per week. For those unemployed workers who have exhausted their regular state unemployment insurance eligibility, the legislation extends the additional federally funded eligibly from 13 weeks to 24 weeks. 
  • $166 billion in direct payments—individuals making up to $75,000 a year will receive a direct payment of $600, while couples making up to $150,000 will receive $1,200, in addition to $600 per child.
  • $69 billion for vaccines, testing and tracing—The package includes $20 billion for the purchase of vaccines, nearly $9 billion for vaccine distribution and about $22 billion to help states with testing, tracing and COVID-19 mitigation programs.
  • $13 billion in SNAP funding—The package includes $13 billion to bolster food stamp benefits by 15% for six months, although it doesn’t expand SNAP eligibility.
  • Business Meals DeductionThe legislation includes a two-year tax break for business meals at 100% deductibility. 

The Preventing Online Sales of E-Cigarettes to Children Act was also included in the legislation. The bill, championed by NACS, closes the online loophole of e-cigarette sales to minors.

Since March, NACS has advocated for Congress to include liability protections for businesses in the next COVID-19 relief package. Unfortunately, liability was omitted from this legislation. Last week, congressional leaders negotiating the package decided to remove what were considered the two most contentious items—liability relief for businesses and state and local aid.

Senate Majority Leader Mitch McConnell (R-KY) has signaled that the issue remains important to him and that he will insist for its inclusion if Congress considers another relief package in 2021. Achieving liability relief for the convenience store industry remains a top priority for NACS, who has led a coalition of 40 essential industry associations in support of it.

Coronavirus Resources
NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.