The Federal Reserve launches an emergency business lending program. The Main Street Lending Program allows banks and other lenders to distribute up to $600 billion in emergency loans purchased by the Fed. A business with up to 15,000 employees or under $5 billion in revenue can apply for the five-year loans. The Fed will purchase 95 percent of the total loan amount to reduce the risks for lenders.
Will PPP loans get congressional oversight? Maybe. Last week, Treasury Secretary Steven Mnuchin told the Senate Small Business and Entrepreneurship Committee that he would not disclose the names and dollar amounts of specific Paycheck Protection Program loans. Faced with strong congressional pushback, Mnuchin yesterday tweeted that he will discuss ways to establish bipartisan oversight that protects business information.
The employee retention tax credit is a flop, so far. The CARES Act also included an employee retention tax credit, but Politico’s Brian Faler reports that just a handful of businesses are claiming the tax break. The problems: complex qualifying rules, a limit of 50 percent of wages up to only $10,000 per employee, and a bar on taking the credit for firms that received PPP money. Lawmakers are looking to expand the program in the next relief bill.
Will the Senate try to expand tax breaks for charitable deductions? The Wall Street Journal takes a deeper look (paywall) at a plan from Sens. Jim Lankford (R-OK) and Jeanne Shaheen (D-NH). They’d expand a temporary CARES Act provision that lets taxpayers deduct charitable donations even if they don’t itemize their deductions. They’d allow non-itemizers to deduct up to one-third the standard deduction, or as much as $4,133 for individuals and $8,267 for married couples. They’d like the Senate to include the measure in its next coronavirus relief bill in July. The senators say the expanded deduction would boost the incentive to give to charities, which have been hard-hit by the COVID-19 recession.
A “giant drug trafficker” wants to change the tax law. The cannabis company Harborside, Inc., plans to challenge the US Tax Court’s conclusion that the company is a “giant drug trafficker, unentitled to the usual deductions that legitimate businesses can claim.” Section 280E of the Internal Revenue Code prevents any company that sells Schedule 1 or 2 controlled substances from deducting ordinary business expenses from their income tax. But Harborside’s attorneys argue that the law violates the 16th Amendment by taxing more than income. Oral arguments on the case may begin next year.
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