While hopes remain high that the federal government will come through with additional coronavirus relief under the incoming Biden administration, ASTA says the time is now for travel agencies to take advantage of the latest round of relief that was passed in December.
The $900 billion Covid-19 relief package contains several provisions useful to travel agencies, the Society said in a media briefing Thursday.
"On the whole, this bill is not as generous as the [$2.2 trillion] Cares Act," said Eben Peck, ASTA's executive vice president of advocacy. But it does contain useful measures for
For starters, those collecting
unemployment will receive an additional $300 per week through
March 14 (just half of the $600
per week provided under the Cares Act, which expired at the end of July). And that goes for independent contractors who are collecting unemployment, as well.
In addition, the new bill appropriates around $284 billion for a new round of Payroll Protection
Program (PPP) loans. Businesses with 300 or fewer employees -- currently, not
prior to the pandemic -- can apply for a first or second forgivable PPP
loan. To be eligible, businesses must demonstrate at least a 25% revenue
reduction in the first, second or third quarter of 2020 compared with the
same quarter in 2019. They can receive up to 2.5 times their average
monthly payroll costs in 2019, with a $2 million cap. That cap was
reduced from $10 million under the Cares Act, Peck said.
Thursday, businesses could not yet apply for the new PPP funds, but Peck
encouraged agencies to get in touch with their banks and accountants
now to get the ball rolling.
The latest round of relief expanded
upon a program created with the Cares Act, the Employee Retention Tax
Credit. Businesses whose revenue is down can get a refundable credit
of $14,000 per employee from the IRS; that is up from $5,000 per employee in 2020. The program runs until June 30.
Under the Cares Act, Peck said, businesses could not take a PPP loan and claim this tax credit. But the new bill changes that: businesses can
take both and retroactively claim the tax credit for 2020. The funds
cannot be used to pay for the same activities or payroll the PPP loan is
used for. The 2021 tax credit can also be claimed in advance, which
will be helpful for agencies' cash flow, Peck said.
It will take
time to understand how these programs will work, Peck said, but ASTA
will assist members as more information is received. He also encouraged agencies to look into small business grant programs, which many states have created.
ASTA requested that members let it know about successes they have with PPP
loans (both gaining forgiveness on the first round and getting a second
round loan) or submit questions, via the portal on
asta.org/covid19member or via email at [email protected]. While the Society is
currently receiving a significant volume of questions, which can delay
response time, every question will be answered.
More help on the way?
While the latest round of relief is helpful, it is largely viewed as a stop-gap measure until a more comprehensive bill is passed. That's something that seems more likely following the results of Georgia's Senate runoff elections earlier this week, which will give Democrats control of both houses of Congress and the White House when Joe Biden is sworn in on Jan. 20.
It's too soon to tell exactly when legislators will begin to formulate another relief package, but Peck said he believes they will want to come out of the gate strongly. There is also a measure in place -- reconciliation -- that could enable the Senate to pass a relief bill with a simple majority rather than the 60 votes typically needed. That, Peck said, means a relief bill could be passed with Democratic votes only.
"I think it could happen pretty soon," he said. "Those unemployment programs are expiring in mid-March. Biden comes in on the 20th -- we're all sort of watching the clock on that -- so I can't say exactly now, but I would say you'll see real action heating up in February."