EDA and Affiliate Members Applaud the Senate’s Passage of the CARES Act

 

For Immediate Release

ST. LOUIS, MO (March 26, 2020) – The Equipment Dealers Association (EDA) and its regional affiliate members praise the United States Senate for passing the Coronavirus Aid, Relief and Economic Security Act (CARES Act) after nearly a week of tumultuous negotiations. A full copy of the Act, can be found here. This package of economic relief initiatives contains various benefits which will assist both EDA Members and their employees across the United States.

EDA and its Affiliate Members continue to encourage the House to quickly take action on the CARES Act and provide equipment dealers, and the rest of the country, with much needed relief in the face of the COVID-19 pandemic. Kim Rominger, President and CEO of the Equipment Dealers Association stated, “We are very happy to see bi-partisan give and take in this time of uncertainty. We need to act together in this crisis, more than ever. We hope the House and President will act quickly.”  EDA will continue to monitor the passage of the CARES Act (hereinafter “the Act”) and will update dealers as guidance on its implementation become available.

Some of the benefits most likely to be utilized by equipment dealers are summarized below:

  1. The Paycheck Protection Program:

This program will provide cash flow assistance through a federally guaranteed loan program offered to small employers (defined as having 500 or less employees). Loans will be available immediately and the covered period is retroactive (from February 15, 2020 until June 30, 2020) to allow the re-hire of previously laid off employees. The loan amount can be used for qualified items such as: salary or wages, payment for vacation, parental, family, medical or sick leave, allowance for dismissal or separation, health insurance premiums, payment of retirement benefits, payment of state or local taxes on employee compensation, etc. No collateral or personal guarantee will be required to qualify for a covered loan. Loan forgiveness may be available for the amount spent by a borrower during an eight week period after the origination date of the loan on payroll costs, interest payment on any mortgage 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. There are limitations on loan forgiveness.

2.Quality Improvement Property:

This program will allow an immediate write off for facility improvements instead of the traditional depreciation schedule. This provision will increase access to cash flow and incentivize investments.

3. Employee Retention Credit:

This program will provide an employee retention credit for employers closed due to coronavirus concerns. It provides a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis. Employer must qualify for the credit. To do so, an employer must demonstrate that they either: (1) have fully or partially suspended operations due to coronavirus related shut-down orders, or (2) gross receipts have declined by more than 50% when compared to the same quarter of the prior year.

Employers are treated differently under the terms of the program depending on whether they fall above or below a 100 employee threshold. For employers with 100 or fewer employees, all employee wages qualify for the credit whether the employer is open for business or subject to a shut down or “shelter” order. For employers with 100 or greater employees, qualified wages are wages paid to the employees when they are not providing services due to the employer’s full or partial suspension of operation and/or the diminished gross receipts (of more than 50% from the same quarter the year prior).

4. Delay of Employer Payroll Taxes:

This program will allow employers to defer payment of the employer share of the Social Security tax. The deferred amount must be repaid over a two year period with half of the amount being paid by December 31, 2021 and the second half due and owing by December 31, 2022.

5.Modifications for Net Operating Losses (NOLs):

This provision allows a Net Operation Loss (NOL) from 2018, 2019 or 2020 to be carried back for five years. It also temporarily removes the taxable income limitation to allow a NOL to full offset income. NOL’s are currently subject to a taxable-income limitations, and they cannot be carried back to reduce income in a prior tax year. These changes will allow companies to utilize losses and amend prior year returns. Doing so is anticipated to increase liquidity during the COVID-19 pandemic.

 

 

 About EDA

Founded in 1900, the Equipment Dealers Association (EDA), is a non-profit trade organization representing retail dealers extensively engaged in the sale and service of agricultural, construction, industrial, forestry, outdoor power, lawn and garden, and/or turf equipment. EDA provides essential value to its members by enhancing the dealer-manufacturer relationship and advocating for a positive legislative and regulatory environment. EDA is headquartered in St. Louis, MO and is affiliated with regional associations located throughout the United States and Canada.

Contact: Alex Hoffman

ahoffman@equipmentdealer.org/636-349-6214