Government Advocacy



EEOC Reminds Employers to Uphold Laws During Pandemic

JUNE 15 -- The Equal Employment Opportunity Commission reminds employers that equal employment opportunity laws—including the Americans with Disabilities Act and the Rehabilitation Act— continue to apply during the COVID-19 pandemic. But they do not interfere with or prevent employers from following the guidelines and suggestions made by the CDC or state/local public health authorities about steps employers should take regarding COVID-19.  

Employers should remember that guidance from public health authorities is likely to change as the COVID-19 pandemic evolves. Employers should follow the most current information on maintaining workplace safety. 


Trump Signs Law Extending PPP Rules

JUNE 5 -- President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) to address the small business concerns in the Paycheck Protection Program (PPP). The modifications to the PPP are important to dealers who have applied for and received PPP loans and intend to have their loan proceeds forgiven. 

NADA's forgiveness analysis lists the PPPFA’s modifications and reviews important issues involving PPP loan proceeds use and forgiveness in light of (1) those modifications and (2) the guidance and forgiveness application materials issued to date by the Small Business Administration and the Treasury Department. Before applying for forgiveness, dealers with PPP loans should contact their legal and accounting experts on how these new modifications will apply. Dealers should also contact their lenders with specific questions.

Also see NADA's CARES Act FAQs, which have been updated to include provisions in the new law.

Note: On Tuesday, June 9, NADA will hold an important Dealership Lifeline webinar on the impact this new law will have on the use and forgiveness of loan proceeds. See below to register. 


Senate Approves PPP Flexibility Act

JUNE 4 -- Last night the U.S. Senate approved the Paycheck Protection Flexibility Act unanimously. The President is expected to sign the legislation, which would: 

  • Reduce from 75% to 60% the percentage of forgivable expenses that must be allocated to payroll costs;
  • Extend the covered period for forgiveness calculations from eight weeks to 24 weeks from the origination date of the loan;
  • Expand the timeframe for making the determination for rehiring from June 30 to December 31, 2020;
  • Provide partial forgiveness reduction relief in the event a borrower can document that it is unable, on or before December 31, 2020, to either 1) rehire or replace individuals who left its employ during the pandemic or 2) return to its pre-COVID level of business activity; and
  • Repeal the provision of the CARES Act that barred PPP forgiveness recipients from deferring employer payroll taxes.

Note: In May, NADA joined a broad coalition of 126 national trade groups in sending a letter to the Trump Administration asking for prompt action, including more flexibility for small businesses participating in the PPP.  


House Passes PPP Flexibility Bill, Senate may vote next week

MAY 28 -- Today in response to concerns from the small business community, the House of Representatives passed a bill to provide more flexibility in the Paycheck Protection Program. NADA is part of a broad coalition of trade associations urging Congress to change the program to reflect the extended economic stress imposed by the COVID crisis.

The bill would:

  • Reduce from 75% to 60% the percentage of forgivable expenses that must be allocated to payroll costs;
  • Extend the covered period for forgiveness calculations from eight weeks to 24 weeks from the origination date of the loan;
  • Expand the timeframe for making the determination for rehiring from June 30 to December 31, 2020;
  • Provide partial forgiveness reduction relief in the event a borrower can document that it is unable, on or before December 31, 2020, either (1) to rehire or replace individuals who left its employ during the pandemic or (2) to return to its pre-COVID level of business activity;
  • Repeal the provision of the CARES Act that barred PPP forgiveness recipients from deferring employer payroll taxes.

The bill will now be sent to the Senate, which returns to session next week and where additional negotiations are possible.


NADA Joins Coalition Advocating Liability Protection

MAY 28 -- Employers deserve protection against opportunistic lawsuits as they reopen their doors, get employees back to work and follow health guidelines to protect against COVID-19 exposure. NADA has joined more than 200 trade associations and other groups urging Congress in a letter to provide temporary and targeted liability relief legislation, as businesses work to bounce back from the pandemic.

The groups are also asking Congress to protect health care workers and facilities providing critical care and services; manufacturers; donors; distributors; and public companies that may be targeted by needless lawsuits related to the coronavirus.


House and Senate Are Close on PPP Loan Extension

MAY 27 -- The House is expected to pass changes to the Paycheck Protection Program on Thursday. House Majority Leader Steny Hoyer said the House and Senate should quickly agree on elements that will make the PPP more flexible. According to the Small Business Administration, loan approvals have slowed dramatically but there’s $100 billion in funding still available.

See additional PPP resources below. 


NADA Joins Industry Coalition to Advocate for PPP Changes

MAY 26 -- Many small business owners have had difficulty accessing Paycheck Protection Program funds. Last week, NADA joined a broad coalition of 126 national trade groups in sending a letter to the Trump Administration, asking for prompt action on a number of pandemic-related items, including more flexibility for small businesses participating in the PPP. 

Note: Dealers can access the Small Business Administration and Treasury Department’s forgiveness application documents published on May 16. NADA urges dealers to review these items carefully and provide the application and accompanying documents to their legal and accounting advisors. 


House to Vote on Paycheck Protection Flexibility Act

MAY 22 -- U.S. Representatives Dean Phillips (D-Minn.) and Chris Roy (R-Texas) introduced H.R. 6886, the Paycheck Protection Flexibility Act. This bipartisan proposal aims to make the Paycheck Protection Program more flexible and extend the time limit for using funds. 


There’s Still Money in the Paycheck Protection Program

MAY 12 -- As of this week, banks have approved around $530 billion in PPP loans. NADA urges dealers to review its CARES Act FAQs and the Small Business Administration’s Frequently Asked Questions (updated May 6).

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Senate, House Committee Chairs Ask Treasury to Reverse Controversial PPP Tax Guidance

MAY 5 -- This afternoon Senate Finance Committee Chairman Chuck Grassley, Sen. Ron Wyden and House Ways and Means Chairman Richie Neal sent a letter to Treasury Secretary Steven Mnuchin asking for the of reversal of guidance that  disallowed deductions on expenses covered by PPP forgiveness. The letter is in response to a recent IRS announcement that expenses paid for by forgiven PPP loans will not be deductible. Reversal of this decision would offer significant tax relief to dealers participating in the PPP.  Read the letter


Fed Adopts NADA-Recommended Change to Main Street Lending Program

MAY 1 -- Yesterday the Federal Reserve Board (FRB) announced favorable changes to its Main Street Lending Program (MSLP). These changes now provide small- and medium-sized businesses additional liquidity to respond to the pandemic. After NADA sent comments to the FRB, it adopted NADA’s recommended changes.

The Main Street Lending Program has now been expanded and will benefit many more dealerships. NADA encourages dealers to review the FRB’s revised term sheets for its various MSLP lending facilities as well as its FAQs that explain the program in greater detail.

See NADA's updated one-pager on the Main Street Lending Program. 


PPP Lending Resumes

APRIL 24 -- The Small Business Administration announced that it will resume accepting PPP loan applications from approved lenders on behalf of eligible borrowers this Monday, April 27, at 10:30am ET. Dealers who previously completed PPP loan applications do not need to resubmit their applications, or submit new applications, to their bank. Both those dealers and dealers who intend to apply for a PPP loan should touch base with their banks regarding their applications.   

 

NADA has updated question 18 of its CARES Act FAQs with additional information on the recent SBA/Department of Treasury guidance regarding the eligibility of large businesses with adequate liquidity to receive PPP loans.


$484 Billon in Coronavirus Aid for Small Businesses

APRIL 24 -- President Trump has signed the $484 billion coronavirus aid bill to help millions of small businesses, giving dealers the opportunity to apply for a loan if they were unable to get a loan approved and funded in the first round. Applicants who did not get funded the first time should contact their lenders as soon as possible.

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The new round of funding allocates:

  • $310 billion for the Paycheck Protection Program;
  • $75 billion for hospitals and health care providers;
  • $60 billion for small lenders and community banks;
  • $25 billion for expanded COVID-19 testing; and
  • $10 billion for Economic Injury Disaster Loan grants 

Note: Tax benefits not available for PPP (revised information)  Dealers who obtain a PPP loan will not be able to defer the payment of payroll taxes once the loan is forgiven. Additionally, dealers with PPP loans are unable to utilize the employee retention tax credit provided for in the CARES Act. Both these issues are discussed in NADA’s CARES FAQs. NADA recommends dealers consult their financial advisors

NADA advocated strongly for additional funding, and sent a letter to Congress last week along with more than 160 trade groups. 

Note: The current bill does not make any changes in the PPP loan process, but the next round of stimulus negotiations has already begun, and there will likely be efforts to create additional transparency for recipients of the PPP loans; as well as changes to the eligibility rules for small businesses to receive a loan. 

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Auto Sales Deemed Essential Service in Updated Guidance

APRIL 17 -- In response NADA’s ongoing advocacy, the U.S. Department of Homeland Security today amended its list of essential critical infrastructure workers during the COVID-19 response to include those “critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers.” See the full list.


Trump Unveils Plan to Reopen Economy

APRIL 17 -- In a press conference last evening, President Trump unveiled a plan—consisting of three graduated phases—called “Opening Up America Again.” State leaders were instructed they could move at their own pace since the guidelines are not formal orders. Phase 1 includes actions like workforce teleworking where possible; avoiding non-essential travel; and continuing to shelter in place for vulnerable individuals. For more information on the guidelines, see the fact sheet on the White House website


NADA Continues to Fight for PPP Funding

APRIL 17 -- The Paycheck Protection Program is officially out of money. The Small Business Administration closed both the PPP and its Economic Injury Disaster Loan program to the public as of April 16. Congressional leadership and the Administration are in negotiations to increase spending for the PPP and may have an agreement by Monday. There are many dealers who have yet to apply for a PPP loan, or have applied for one but have not yet been approved. NADA has signed on to a letter to Congress and is pushing hard for additional PPP funding.  Read the letter


Congress Negotiating Next Stimulus Bill; Agreement Possible This Weekend

APRIL 17 -- Democrats and Republicans have been sparring this week over additional aid to replenish the PPP. House Minority Leader Kevin McCarthy said he would support allocating an additional $75 billion for hospitals, as requested by Democrats, in the small-business emergency relief package. Rep. McCarthy proposed pairing hospital funding with an additional $250 billion for the PPP, which would likely help negotiators reach a deal as soon as this weekend.


Some Tax Benefits in CARES Act Are Not Available for PPP

APRIL 2 -- Dealers who obtain a PPP loan will not be able to defer the payment of payroll taxes. And they won’t be able to utilize the employee retention tax credit from the CARES Act. Consult your financial advisors to compare the cash flow benefits of these tax provisions vs. a PPP loan. Both are explained on page 11 of this document.


Employee Retention Credit Available to Many Small Businesses

APRIL 2 -- The CARES Act includes an Employee Retention Credit available to many small businesses, designed to encourage them to keep employees on the payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19. This credit is not available to dealers who participate in the Paycheck Protection Program (PPP). This announcement also includes forms for dealers who are requesting an advance of tax credits under both the Employee Retention Tax Credit and tax credits provided under the FFCRA. See the IRS’s press release with Q&A.  

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The IRS has issued guidance for claiming the new employee retention credits for emergency paid sick leave and emergency paid childcare leave under the FFCRA.  Learn more

The IRS application for obtaining the credits is in a single form, IRS 7200. Download it here.

It’s important to understand the many different aspects of the employee retention credit. You can also find answers to your questions in the Employee Retention Credit FAQs.  

Note: The FAQs were prepared by the Republican Finance Committee staff for informational purposes and should not be relied on for legal advice. Employers should consult the IRS or a tax advisor to address questions related to their specific circumstances.

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Phase 3 of Coronavirus Response Passed; Includes Employee Retention Credit and Other NADA-Backed Provisions

APRIL 1 -- On March 27, President Trump signed into law the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. Known as Phase 3, the bill is beneficial for dealerships of all sizes and includes generous provisions to help provide liquidity for dealerships and keep employees on the payroll. 

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NADA advocated for provisions included in the law, such as new federal funding to cover operational and payroll expenses for small businesses through June 30, deferring payroll tax payments for employers and other important tax relief. NADA urges all dealers to closely review its updated analysis for dealers, which provides a preliminary summary of provisions  relevant to dealers. In addition to those provisions, an additional $600 has been added to unemployment benefits per week for four months on top of what your state pays. Also note, the bill extended the tax filing date to July 15, 2020; the Treasury Department has delayed both the filing and payment of all income taxes until July 15. The Treasury guidance can be found here.  

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The FFCRA Law Takes Effect

APRIL 1 -- To assist employees with absences that may be related to COVID-19, the federal government passed The Families First Coronavirus Response Act (FFCRA). The FFCRA takes effect today. The Department of Labor published an Employee Rights poster explaining the provisions of the new FFCRA, including paid sick leave and expanded family and medical leave. NADA’s revised FAQs on FFCRA is an excellent resource that reflects DOL’s latest guidance.  


NADA Chairman Rhett Ricart Addresses NADA Members in New Video

MARCH 27 -- NADA Chairman Rhett Ricart released a video in which he discusses the challenges facing dealers during the pandemic and highlights NADA's priorities, activities and resources available.

Watch the video
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U.S. House Passes CARES Act

MARCH 27 -- Today the U.S. House passed Covid-3, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, clearing the $2.2 trillion measure; the President is expected to sign the bill into law promptly. Congress acted with extraordinary speed: the measure was drafted in the Senate and approved by the entire Congress in just over a week.

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The bill contains NADA-supported provisions which we have previously summarized, such as the new guaranteed loan program for small businesses and the extensive tax relief for individuals and businesses. One aspect of the bill is especially noteworthy for dealers: in general, the new small business loan will be limited to businesses with 500 or fewer employees. 

Thanks to the many dealers, NADA directors and state and metro association executives who worked in support of this bill and the provisions favorable to dealers.

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NADA Blog: White House Provides Update on COVID-19 Pandemic

MARCH 26 --Today, the White House released an updated comprehensive list of tools and resources in the fight against coronavirus. They include a number of websites, contact information, declarations, and other information on donating supplies, government initiatives, declarations and other coronavirus information. Read more


NADA All Dealer Bulletin: Senate Passes Phase 3 Coronavirus Response

MARCH 26-- Late last evening, the Senate passed the nearly $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. This bill, known as Phase 3, is extremely beneficial for dealerships of all sizes and includes generous and unprecedented provisions to help provide liquidity for dealerships and to help businesses keep their employees on the payroll. The House of Representatives is expected to vote on the Senate measure tomorrow; and the President has pledged to sign the bill into law quickly.

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NADA advocated for provisions included in the Senate bill, such as new federal funding to cover operational and payroll expenses for small businesses through June 30, deferring payroll tax payments for employers, and other important tax relief. NADA continues to advocate for the broadest possible business relief to help dealerships continue in operations and retain employees.

The following provides a preliminary summary of provisions of most interest to franchised dealers.

Small Business Loan Provisions

A completely new, temporary lending program to aid small business The bill will provide $349 billion to support  loans through a new Paycheck Protection Program, which Congress designed to keep employees on the payroll and save small businesses. The Small Business Administration (SBA) will stand up a completely new program that will only nominally be part of the existing SBA Section 7(a) loan program. To expedite the funding of the new loans, the Treasury Department and SBA will expand the number of participating banks and credit unions, and captive finance companies may also be included. 

Minimal eligibility requirements Any business operational on February 15, 2020, that paid salaries and payroll taxes will be eligible, but there is a limit of no more than 500 employees. Fortunately, the bill includes provisions to waive normal affiliation rules which should be applicable to many dealers. For dealers, there will be no test for total revenue.

Borrower certification to obtain loan Borrowers will be required to make a good-faith certification that the loan is necessary due to economic conditions caused by COVID-19 and that it will use the funds to retain workers and maintain payroll, lease and utility payments. 

Loans have terms NOT found in traditional bank loans Lenders will not require application fees, closing costs, collateral or personal guarantees. The maximum interest rate will be 4%, and the first six months' payments (principal and interest) will be automatically deferred. Finally, the lenders are not expected to perform credit analysis, because the loans will be 100% guaranteed by the SBA.  

Maximum loan amount The maximum amount will be 250% of an employer’s average monthly payroll (based on a 12-month look back from the date of the loan), but NOT MORE than $10 million. 

Permitted uses of the loan The loan can be used for “payroll costs,” which include salary, commission, or similar compensation (up to an annual rate of pay of $100,000 per employee); employee group health care benefits, including insurance premiums; retirement contributions; and covered leave from February 15, 2020, to June 30, 2020. Permitted uses also include payments of interest on mortgages, rent, utilities and interest on any other debt obligations that were incurred before February 15, 2020. 

Loans may be forgiven In general, borrowers will be eligible for loan forgiveness equal to the amount of certain expenses spent during an eight-week period after the origination date of the loan. These expenses are payroll costs, interest payments on any secured debt incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.  

Percentage of employee retention related to amount of loan forgiveness The amount forgiven will be reduced proportionally by any reduction in employees retained compared to the prior year, and by the reduction in pay of any employee in excess of 25% of the employee’s prior-year compensation. However, to encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that rehire previously laid-off workers by June 30, 2020, will still qualify and not be penalized for having a reduced payroll during the loan period.

No effect on federal Income tax Canceled indebtedness under this program will not be included in the borrower’s taxable income.

Loan amounts not forgiven Any loan amounts not forgiven at the end of one year will be carried forward as an ongoing loan with terms of a maximum of 10 years at 4% interest or less. 

Tax Provisions Applicable to All Businesses

The CARES Act contains many dealer-friendly tax provisions that will assist dealers in maintaining liquidity during the disruptions caused by the ongoing coronavirus outbreak.  

Net operating loss (NOL) carryback Dealers will be permitted to offset losses in 2018, 2019 and 2020 against profits from the prior five years. NOL carryback was previously eliminated by the Tax Cuts and Jobs Act (TCJA) in 2017. This provision may provide dealers with losses in 2020 with substantial refunds. Losses that are used to offset pre-TCJA profits, which were taxed at a higher rate, will be refunded at pre-TCJA tax rates, providing an additional boost. 

Modification on losses for taxpayers other than corporations TheTCJA generally limited the amount of losses noncorporate taxpayers, including pass throughs, could claim to $500,000. Under the bill this limitation is suspended, allowing dealers to utilize excess business losses along with the new NOL carryback provisions to access critical cashflow.  

Qualified improvement property (QIP) technical fix The TCJA intended for businesses to deduct improvements made to retail property immediately under the TCJA’s bonus depreciation provisions, but due to a drafting error the depreciation lifespan was set at 39 years. This bill corrects this error retroactive to 2018. Dealers with significant outlays on QIP in previous years should consider amending their 2018 and 2019 returns to claim the deductions and receive a refund. 

Interest deductibility limit increased. The TCJA limited the deductibility of business interest to 30% of a dealership’s adjusted taxable income, except for floor plan financing interest, which remained 100% deductible. The bill allows businesses to deduct up to 50% of their adjusted taxable income for 2019 and 2020. Dealers should note that, coupled with the proposed IRS rules on the interplay between bonus depreciation and floor plan financing interest, if their total business interest, including floor plan financing interest, amounts to less than 50% of adjusted taxable income for these years, they may also be able to avail themselves of the bonus depreciation provisions in TCJA. Dealers unable to use full expensing in 2019 due to interest expenses between 30% and 50% of their adjusted taxable income may be able to generate refunds by filing an amended 2019 return.  

Employee retention credit Dealers who have been forced to close their business due to a government-mandated shutdown will be allowed a refundable payroll tax credit for retaining their employees. The credit is generally available to dealers whose operations have been fully or partially closed due to a government mandate and whose gross receipts have declined by more than 50%. For dealers with 100 or fewer employees, all employee wages qualify for the credit regardless of whether the business is shut down or not. The credit is limited to the first $10,000 of compensation paid per employee. This credit is available through the end of 2020. 

Delay of payroll taxes The bill allows businesses to delay the 6.2% employer portion of the Social Security payroll tax for the remainder of 2020. The delayed tax liability would then be paid back apportioned equally over the following two years.

As further details become available, NADA will release a more extensive summary of these provisions. For any questions, contact legislative@nada.org.

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Dealer Groups, ATD, Alliance for Automotive Innovation Urge Trump to Clarify Auto, Truck Sales as Essential

MARCH 24 -- Leaders of NADA, the American Truck Dealers (ATD), the National Association of Minority Automobile Dealers (NAMAD), the American International Automobile Dealers Association (AIADA) and the Alliance for Automotive Innovation sent a letter to President Donald J. Trump asking for clarification that vehicle sales are essential services that need to be maintained during the COVID-19 pandemic. Press release I Blog post

 


NADA Asks Congress for Swift Approval of Economic Stimulus Package

MARCH 23 -- NADA, auto manufacturers send a joint letter to congressional leaders calling for swift passage of an economic stimulus package to address the impact of the escalating COVID-19 health crisis.  Press release | Blog post | Read the letter


Homeland Security Issues Guidance Saying Auto Service Is Essential

March 19 -- The Department of Homeland Security Cybersecurity & Infrastructure Security Agency (CISA) releases guidance listing automotive repair and maintenance facilities as part of the "Essential Critical Infrastructure Workforce." Read the guidance


NADA Urges Action on COVID-19 Legislation

MARCH 18 -- NADA, industry groups, send a letter to President Trump, Speaker Pelosi, and Majority Leader McConnell urging action on COVID-19 economic stimulus legislation. Read the letter



NADA and Alliance Call on Trump Administration to Consider Dealerships Essential Businesses

MARCH 17 -- Given the lack of uniformity in how states and local municipalities taking action are classifying dealership sales, service and parts operations, NADA and the Alliance have requested that the U.S. government ensure that the nation’s motor vehicle fleet remains as safe and operational as possible by considering vehicle repair, maintenance and sales facilities as essential operations during the coronavirus outbreak. Blog post | Press release | Read the letter


NADA Coronavirus News

NADA Issues Second Quarter 2020 Auto Sales Analysis

POSTED ON July 09, 2020

During this quarter, retail sales recovered much more quickly than fleet sales from the effects of the COVID-19 pandemic.  
2021 NADA Show the Most Important Yet

POSTED ON July 09, 2020

I simply can’t stress the importance of the upcoming NADA Show more. Now is the time for us to learn from the experts at the Show and from each other.  
NADA Market Beat: June Vehicle Sales Increased to 13 Million SAAR

POSTED ON July 07, 2020

New light-vehicle sales in June improved compared to May but remain down significantly compared to this time last year.  
The Fleet Versus Retail Disconnect in May’s Sales Numbers

POSTED ON June 16, 2020

Fleet sales were down year-over-year by a whopping 72% in May, while retail sales only fell by 17%.