ASTA, U.S. Travel: New COVID Relief Package Better Than Nothing

Washington DC National Capitol Building
Photo by Getty/lucky-photographer

Congressional leadership and the Trump Administration have come to agreement on a $900 billion coronavirus relief package. While the bill—the first substantial relief legislation since the CARES Act in March—is expected to pass both chambers of Congress and be signed into law the coming days, it is possible that additional changes might be made.

Zane Kerby, president and CEO of the American Society of Travel Advisors (ASTA), said in a statement: “We welcome the fact that Congress has finally done its job and provided new relief to distressed sectors of the economy, including a number of provisions ASTA and its members have been advocating for since April, like the ability for hard-hit companies to apply for an additional PPP loan.

“That said, more support for our members beyond this bill will absolutely needed. Thankfully, this package is widely considered a short-term ‘bridge’ into early 2021 and it is clear that the next Congress will take up additional relief legislation in the 1st Quarter. Something is better than nothing, and we appreciate the breathing room this bill will afford the vast majority of our members. But the fight continues and will until the travel agency sector is restored to health.”

Virtual Event

Pivoting Back to Travel, The Destination Weddings & Honeymoons Edition

2020 put the nuptial plans of thousands upon thousands of couples on hold, but with the promise of widespread vaccine distribution in the near future, it’s time to get back to planning and ensure your clients live out the destination weddings & honeymoons of their dreams. Hear from top suppliers and destinations on wedding venue & ceremony options, romantic destinations & resorts and more when you watch the event on-demand.

U.S. Travel Association president and CEO Roger Dow called the COVID relief package “a huge holiday gift to U.S. businesses and workers after an incredibly challenging year.”

In a statement, he continued: “It’s been a difficult road to get another round of much-needed legislative relief moving in Washington. We applaud the bipartisan group of senators that drove progress forward, and the congressional leadership for striking a bipartisan agreement to produce this desperately needed assistance. The agreed-upon provisions will give many suffering businesses a bridge to 2021.

“More will be needed to restore the 4.5 million travel jobs lost in the travel and tourism industry, but the process that produced this agreement is hopefully a positive sign for what will be possible to achieve in the next Congress. We urge swift action on this important legislation.”

Among the provisions of the bill that ASTA has advocated for since April:

  • PPP “Second Draw” Loans: The bill includes $284 billion to allow the hardest-hit small businesses and independent contractors (ICs) to receive a second forgivable Paycheck Protection Program (PPP) loan. “Forgivable” expenses are expanded to include supplier costs and investments in facility modifications and personal protective equipment to operate safely. Calculations of loan size are consistent with the CARES Act, but loans are capped at $2 million. Under the bill, the loan forgiveness process is simplified for borrowers with PPP loans of $150,000 or less.
  • Deductibility of PPP Loan Proceeds: Under the bill, business expenses paid for with the proceeds of PPP loans are tax deductible for the purposes of 2020 tax returns. This is consistent with Congressional intent in the CARES Act, which clearly stated that recipients of forgiven PPP loans be able to deduct otherwise-deductible expenses associated with those loans for tax purposes. But in July the Internal Revenue Service (IRS) contradicted Congressional intent, declaring that borrowers who expect their PPP loan to be forgiven cannot deduct those expenses on their federal tax returns. Without Congressional action, small businesses across the country are estimated to pay over $120 billion in taxes on forgivable PPP loans.
  • Extension of the Employee Retention Tax Credit: The legislation extends and expands the refundable Employee Retention Tax Credit (ERTC), which was established in the CARES Act. The extension of this tax credit is intended to help keep additional U.S. workers on payroll and more small businesses and nonprofits across the country afloat.
  • Extension of CARES Act Unemployment Programs: This bill would restart the extra benefits at a level of $300 per week (versus $600 in the CARES Act, which expired on July 31) and would through the extend broadened eligibility for ICs, both through March 14, 2021.

Over the holidays, ASTA says it will be analyzing the entirety of the package for provisions impacting its members and will explore key questions related to how to apply for a second PPP loan, the Employee Retention Tax Credit and unemployment benefits. It also plans to hold a member webinar in early January to provide members with a preliminary analysis.

This article originally appeared on www.travelagentcentral.com.

Related Articles

Questex Hospitality & Travel: Best Of 2020; Expectations For '21

Luxury Forecast for 2021

ASTA's Kerby Receives STN's Michelle Morgan Leadership Award

Travel Innovations: Leading Independent Agencies Launch Alliance

Suggested Articles:

The first Raffles Resort is set to open in the Middle East later this year, located on the iconic Palm Jumeirah. Here's what you can expect.

The 25-year travel industry veteran will spearhead the global, guest-centered market approach for the luxury cruise line. Learn more here.

Together, Accor and the International LGBTQ+ Travel Association will work to ensure the hospitality industry is a safe and inclusive space for all.