Paycheck Protection Program (PPP) forgivable loans, which were used by nearly 90 percent of recreational boat dealerships for support during the shutdowns caused by the pandemic, are at risk of being included as income by some state governments, possibly making the forgiven portions taxable.
Passed in the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, the U.S. Government distributed more than $500 billion in PPP loans to qualifying small businesses last year. Guidance on the program has changed several times since it was first passed, most recently in the $1.4 trillion omnibus/COVID-19 spending package, which clarified the original intent of PPP with the Internal Revenue Service to ensure that forgiven PPP loans were not included as taxable income at the federal level, and that businesses can claim normal tax deductions for business expenses paid for with forgiven portions of PPP loans.
Here’s where things get tricky.
Each state implements its own income tax structure that has some degree of conformity with the federal Internal Revenue Code. Twenty-one states and the District of Columbia automatically adopt any changes made at the federal level through what’s called “rolling conformity,” meaning that boat dealers in these states with forgiven PPP loans likely won’t pay taxes on the proceeds of the loan. The Tax Foundation, a Washington, D.C.-based think tank that publishes data and research studies on U.S. tax policies at both the federal and state levels, argues that states could choose to not comply with the guidance provided in the recent omnibus package, since it did not expressly modify the tax code. Consider rolling conformity states as “opt-in” states, where lawmakers or state revenue officers would need to opt-in to taxing PPP as income.
In 19 other states, lawmakers must vote to conform to any changes in the tax code, which in this case, excludes PPP from taxable income. This is called “static conformity.” This is an “opt-out” method, where state lawmakers would likely tax forgiven PPP loans unless specific guidance is given stating otherwise, or legislation is passed to exempt forgiven PPP loans from state taxable income.
Yes, it’s confusing, and it doesn’t end there: Five states have “selective tax conformity,” which, according to The Tax Foundation, means that they “may incorporate certain federal provisions or definitions by reference, but omitting large swaths of the federal tax code and forgoing the use of federal definitions of income as their own starting points for calculation.”
Five other states do not tax income. Meanwhile, Pennsylvania and Massachusetts have rolling tax conformity for corporate income taxes, but have static/selective conformity for individual income taxes.
In the Tax Foundation chart on the left below, states with static conformity are highlighted in yellow. You’ll notice when comparing it to MRAA’s chart (right), that some of those states (i.e. California, Hawaii, Indiana, Kentucky, North Carolina, Ohio, Oregon, South Carolina, etc.), which are highlighted in green, already passed legislation or issued guidance clarifying that forgiven PPP loans will not be included as taxable income; other states highlighted in green have rolling tax conformity. States highlighted in blue on the right have not yet issued clarifying language or legislation at the time this article was written; while, states in red have indicated that they will tax forgiven PPP loan proceeds.
South Dakota and Wyoming do not impose corporate or personal income taxes. Nevada does not impose a personal income tax and only imposes gross receipt taxes, in lieu of corporate income taxes. These three states are striped for these reasons.
Newly introduced legislation in Maine (also striped) proposes to not tax the first $1 million of forgiven PPP loans a business received. Massachusetts, New Jersey and Wisconsin legislatures have introduced bills explicitly seeking to exclude forgiven PPP loans from taxable income.
The Marine Retailers Association of the Americas is monitoring this situation closely, and working with MRAA members and partners in each state in an effort to ensure that states comply with PPP tax forgiveness, as was originally intended. When state governments don’t conform with the recent omnibus guidance and exclude forgiven PPP loans from income, dealers face more complicated and costly tax burdens, effectively undermining a program that was intended to help keep their businesses open through the pandemic.
Many states have not announced how they will proceed with this matter, but there is concern and speculation that many state governments may tax forgiven PPP loans to help make up for a collective $121 billion revenue shortfall over the next two years. But the conversations around this topic are gaining steam.
MRAA will continue to update you on these matters, but in the meantime, you can see how your state is treating forgiven PPP loans, or if your state allows deductibility of expenses paid with PPP loans, by reviewing the table below.
State |
Taxability of forgiven PPP loan |
Deductibility of expenses paid for by PPP loan |
Resources |
Alabama |
Not Taxable |
Deductible |
|
Alaska |
No Guidance |
No Guidance |
|
Arizona |
No Guidance |
No Guidance |
|
Arkansas |
No Guidance |
No Guidance |
|
California |
Not Taxable |
Not Deductible |
|
Colorado |
No Guidance |
No Guidance |
|
Connecticut |
Not Taxable |
No Guidance |
|
Delaware |
No Guidance |
No Guidance |
|
Florida |
No Guidance |
No Guidance |
|
Georgia |
No Guidance |
No Guidance |
|
Hawaii |
Not Taxable |
No Guidance |
|
Idaho |
No Guidance |
No Guidance |
|
Illinois |
No Guidance |
No Guidance |
|
Indiana |
Bass Pro Shops Founder Johnny Morris invites everyone to ‘Get Back to Nature’ in Super Bowl debutSPRINGFIELD, Missouri – Bass Pro Shops and Cabela’s, North America’s premier outdoor and conservation company, today unveiled its first-ever Super Bowl commercial, a heartfelt message about nature’s healing power. With stunning cinematography, evocative music and a genuine tone filled with hope, the 60-second commercial, titled “Get Back to Nature,” features people everywhere returning to adventure in the great outdoors. Messaging reminds viewers that, “the great outdoors are wide open,” and “to get back to nature” and “connect with the ones we love the most.” “In times like these, we need nature more than ever. If there is a bright spot in these challenging times, it’s that’s more families are discovering the outdoors than ever before. Casting a line on the water, hiking in the woods and camping out under the stars provide us all with much more than social distancing,” said noted conservationist and Bass Pro Shops founder Johnny Morris. Bass Pro Shops is especially
excited to be part of this year’s supercharged Super Bowl. It’s a legendary matchup featuring Patrick Mahomes and Bass Pro’s home state’s Kansas City Chiefs against Tom Brady and the Buccaneers just down the road from its Tampa destination store in
the heart of great fishing. “On the eve of the 50th anniversary of Bass Pro Shops, in addition to providing added inspiration for families to get out in nature together, we wanted to celebrate and say thank you to our incredibly talented and passionate team members at Bass Pro Shops and Cabela’s stores across North America who have very deservingly earned the reputation as, ‘The World’s Foremost Outfitters,’” Morris added. Fifty years ago, as an avid young angler Johnny Morris founded Bass Pro Shops in the back of his father’s liquor store in Springfield, Missouri, the company’s sole location for its first 13 years. Over the course of the years that followed, the outdoor retailer has established itself as one of America’s most beloved brands. Last year, Bass Pro Shops was recognized as the #3 Most Reputable Retailer in America by Reputation.com. The company manufactures Tracker Boats and ATVs as well as Ascend kayaks that also are proudly showcased in the outdoor-themed message. At the heart of Bass Pro Shops and Cabela’s is a deep and unrivaled passion for conservation
About Bass Pro Shops and Cabela’s Bass Pro Shops is North America’s premier outdoor and conservation company. Founded in 1972 when avid young angler Johnny Morris began selling tackle out of his father’s liquor store in Springfield, Missouri, today the company provides customers with unmatched offerings spanning premier destination retail, outdoor equipment manufacturing, world-class resort destinations and more. In 2017 Bass Pro Shops acquired Cabela’s to create a “best-of-the-best” experience with superior products, dynamic locations and outstanding customer service. Bass Pro Shops also operates White River Marine Group, offering an unsurpassed collection of industry-leading boat brands, and Big Cedar Lodge, America’s Premier Wilderness Resort. Under the visionary conservation leadership of Johnny Morris, Bass Pro Shops is a national leader in protecting habitat and introducing families to the outdoors and has been named by Forbes as “one of America’s Best Employers.” Why You Need to Read More BooksHow becoming a dedicated monthly bookworm can change your life
MRAA President Matt Gruhn is participating in this friendly reading foray as well. He told me he’s already completed six books in 2021. Honestly, I’m still only on one hand and I find that somewhat dispiriting. You see, when I first started at the MRAA in August, I was given the go-ahead to order some skills-based books that were meant to help educate and encourage me, not add more to my plate. So far, I’ve tackled Building a Story Brand by Donald Miller and They Ask You Answer by Marcus Sheridan. However, I’ve also added daily reads of Soul Fuel by Bear Grylls and two podcasts over the last month, which Spence says counts as long as they are skills-based and for growth. In fact, one podcast I’m enjoying is Rob Dial’s “Mindset Mentor” series. The episode titled “9 Habits of Successful People” listed the No. 5 habit as “read often.” Coincidentally, this is an excerpt from a BOOK titled Hack Your Goals: The Step-by-Step Guide to Achieving Success that Dial co-authored with Dean DeVries. The podcast shared that the average CEO reads 60 books a year. Not six or even 12, but 60! That’s FIVE books a month. Some of the most successful people on earth read five times the amount of books Spence informed us would place you in the top one percent. That’s extraordinary! Spence added in his Dealer Week session — BTW, you can register and watch it today along with the other training courses from the MRAA conference! — that the average college graduate reads half a book a year (on skills). And now we’ve found practically the opposite end of the spectrum compared to the CEOs Dial spoke about. Wow! I don’t know about you, but I’m diligently trying to improve at this personal dedication to increase my reading frequency and book totals. Will you take Spence’s challenge with me? It is this: Invest in 15 minutes a day (5 hours a month) to study and learn by reading or listening to a book. YES, audiobooks count as well, and are ideal for those of you who spend a lot of time alone driving or traveling. Spence says, “if you did this consistently, you’d be in the top 1 percent in the world, and in three or four years, you would see a huge positive impact in your life and your career.” Making the commitment to create a huge win in your life and career seems like a no brainer to me. I’ve created my own list of reasons for going all in when it comes to book reading that could entice you even more. There are literally dozens of reasons why you should read more and do less of other mindless things. I’ve only listed a few. 10 Reasons Why You Need to Read And finally, I’ll leave you with a place to start your own personal and professional library. You could begin with one of the books I’ve listed already above or select a few from a peer-to-peer book recommendations list I constructed from the conversations during Spence’s session at MRAA’s Dealer Week 2020 virtual conference and expo. Dealers, you can generate ideas for starting in-house book clubs or competitions to improve teamwork and staff IQ/EQ/AQ. It can be a way to enhance onboarding of new employees or be incorporated into your existing continuous training plans. It’s really up to you to take this information and challenge and run with it. Also, let me know (send me an email: jerrod@mraa.com) if you’ve read any of these books already or have a recommended book that has changed your life, attitude or approach. 18 Peer-to-Peer Book Recommendations from MRAA’s Dealer Week session “How to Thrive on the Other Side of 2020” with John Spence Bipartisan Gulf Reef Fish Bill Signed into LawThe Direct Enhancement of Snapper Conservation and the Economy through Novel Devices Act of 2020 (DESCEND Act) (H.R. 5126/S. 2960) was signed into law January 13. The bipartisan law requires recreational (including charter boats) and commercial fishermen to have on board a venting tool or descending device that is rigged and ready for use while fishing for reef fish in Gulf of Mexico federal waters. The recreational fishing and boating community strongly supports the DESCEND Act, which was led in the House by Congressmen Garret Graves (R-La.), Jared Huffman (D-Calif.) and Steve Palazzo (R-Miss.), and in the Senate by Senators Bill Cassidy (R-La.), Doug Jones (D-Ala.) and John Cornyn (R-Texas). As anglers use these devices to return more fish to the deep, we will see conservation gains for Gulf of Mexico reef fish for many years to come. “Reef fish in the Gulf of Mexico are economically and culturally important to the region, and we are thrilled that the DESCEND Act has been signed into law to tackle wanton waste of these prized fish,” said Jeff Angers, President, Center for Sportfishing Policy. “The future of recreational fishing and America’s blue economy depends on an abundance of fish and the opportunity to catch them. The DESCEND Act supports both of these goals.” Red snapper and other reef fish are often returned to the water for a variety of reasons (e.g., being caught out of season, under the size limit or over the bag limit). Due to the rapid change in pressure from being brought to the surface from depth, many of these fish experience barotrauma – a condition where a buildup of gas pressure in their bodies makes it difficult or impossible to swim back down. Consequently, countless fish returned to the water can die at the surface or fall victim to opportunistic predators. A descending device is a weighted hook, lip clamp or box that will hold the fish while it is lowered to a sufficient depth to recover from the effects of barotrauma and release the fish. A venting tool is a sharpened, hollow device capable of penetrating the abdomen of a fish to release the excess gas pressure in the body cavity when a fish is retrieved from depth. “The signing of the DESCEND Act is a culmination of a multi-year effort by the recreational fishing community and our champions in Congress to further demonstrate our commitment to marine resource conservation,” said Mike Leonard, Vice President of Government Affairs, American Sportfishing Association. “This effort will result in saving hundreds of thousands of red snapper annually, promoting a healthier resource and improving fishing opportunities in the future.” “Considering that a significant percentage of recreational fish are caught and released alive, the use of descending gear will increase the number of fish that survive to be caught again at a larger size or later when in-season,” said Ted Venker, Conservation Director, Coastal Conservation Association. “This conservation-minded law is an important piece of our overall efforts to reduce all sources of discard and bycatch mortality, and ensure marine resources are healthy now and in the future.” “Requiring descending devices for both commercial fishermen and recreational anglers fishing for reef fish in the Gulf of Mexico is an important first step,” said Chris Horton, Senior Director of Fisheries Policy, Congressional Sportsmen’s Foundation. “We look forward to working with the Gulf of Mexico Fishery Management Council on the implementation of the requirement, as well as encouraging their use, so that we can realize the full benefit for reef fish conservation.” Wake Surfing Restrictions Proposed in Four StatesAs state legislatures begin their new sessions in the coming weeks, the Marine Retailers Association of the Americas (MRAA), National Marine Manufacturers Association (NMMA) and the Water Sports Industry Association (WSIA), are engaging with policy makers on key issues including wake surfing access. There have been four states that have proposed legislation that would restrict wake surfing, and more are expected to in the coming weeks and months. For more information, please contact MRAA’s government relations manager, Adam Fortier-Brown at adam@mraa.com or NMMA manager of Great Lakes policy and engagement, Jill Sims at jsims@nmma.org. Active Wake Surfing Legislation Indiana (HB 1098)
New Hampshire (HB 229 and HB 115)
Oregon (HB 2555, HB 2725, and HB 2734)
Virginia (HB 2083)
Level 5 Commits to MRAA Platinum Partner MembershipMINNEAPOLIS — Feb. 1 — The Marine Retailers Association of the Americas announces Level 5 has become a Platinum Partner Member.
Level 5, headquartered in Herndon, Va., is a full-service advertising agency offering marine dealerships and retailers marketing strategies, consistent branding tactics and best practices for developing its clients’ voices, missions and values. With Compass®, its technology-driven platform, and website proficiency, Level 5 enables and empowers its clients to achieve intelligent marketing both online and offline. Its amicable and thorough approach delivers an efficient and frictionless consumer experience, while also cultivating brand recognition and intense customer loyalty for its clients. “We have felt so honored to get the opportunity to become a Platinum Partner and join our great marine clients that are members with MRAA,” said Todd Wilkins, CBO, Level 5. “We believe in getting the marine industry to the highest levels of great frictionless client experiences one boat family at a time!” Through Partner Membership, marine manufacturers, suppliers and service providers commit to aligning their brands with the programs and opportunities that MRAA works to provide the dealer body in order to help fuel the success of the industry. Support from Partners allows the Association to expand its offerings and create a positive, long-term impact in the business of MRAA members. “We welcome Level 5 as a Platinum Partner Members with the MRAA,” said Allison Gruhn, Director of Business Development. “Adding an organization with superb knowledge, dynamic technology and a strategic focus on the customer experience will certainly benefit MRAA members. We welcome their support for the association, as it energizes our mission to supply today’s boat and engine dealers with prominent tools, resources and educational programming.” About the Marine Retailers Association of the Americas About Level 5 At Level 5 we believe there is a better way to capture your customer’s needs instantly while delivering a frictionless experience that converts leads quickly without the hassle of endlessly checking your email or phone messages. We put it all together for you in one place, no hassle, no fuss, so you can spend more time building customer relationships. We are obsessively passionate about bringing the best experience to both your dealership team and your customer. The fastest growing Marine Agency in the world! Let’s #rowtheboat together! www.level5advertising.com/ MRAA 2020 Impact Report: Dealer Engagement Hits All-Time High
MRAA today released its Annual Impact Report, which shows that dealer engagement with the association rose to record levels during 2020.
“Being there for dealers in a year like 2020 is exactly why MRAA exists,” said Mike Davin, Brand Director at MRAA. “When we reviewed MRAA’s engagement numbers, we were really honored how many dealers turned to the association as a trusted resource during such a difficult year.”
The MRAA releases an Impact Report each year to show how its initiatives have benefited members, partners and the industry at large. In 2020, highlights included increased legislative advocacy work, a rapid response to Covid-19 in the spring and the successful launch of a virtual Dealer Week. As a result, MRAA increased membership, conference attendance and unique BoatPAC donors.
Read the complete report here.
Dealer Profit Releases Compliance Preparation, Compliance Certification ProgramCompliance Preparation and Compliance Certification Program offers Marine, RV, Powersports Dealers with ability to demonstrate “good faith” compliance effortATHENS, GEORGIA, USA, February 1, 2021 /EINPresswire.com/ — “Compliance, when it comes to identifying and protecting against identity theft, protecting against any form of trafficking with terrorists, terrorist organizations, and sympathizers, and protecting against any form of entanglement with money laundering activities, is always important for dealers – and it is also hard to manage correctly,” states Myril Shaw, COO of Dealer Profit Services. “We developed our Compliance Preparation and Compliance Certification Program to make compliance a ‘no-brainer’. It is on-demand. It is available when and as needed. It is comprehensive. It is easy!” With the newly released Compliance Preparation and Compliance Certification Program (CPCPP) annual subscription, Dealer Profit Services (DPS) provides all Marine, RV, and Powersports dealers with the following tools, capabilities, and content: • Complete Compliance Documents available whenever and as often as needed and fully branded for the Dealership including:
• Full Compliance Training via video content available whenever, as often as needed, and to as many dealer personnel as required – content is comprised of seven distinct video units in lengths ranging from 20 minutes to 45 minutes which may be watched on-demand and at the convenience of the viewer, with the ability to pause and return to the viewing at a later time – on completion a document in the name of the viewer is produced and made available to the dealership showing when the videos were watched by each viewer and suitable for inclusion in both the personnel file and with the Compliance Documents During the period of the subscription any or all CPCPP is available on-demand and as frequently, as often as desired at the complete convenience of the Dealership and personnel. Pricing starts at $1,999.00 for the first year and $999.00 for subsequent years with discounts available for multi-location dealerships, 20 Group participants and DPS Financial Services customers. Additional pricing information, as well as sign-up information, is available by clicking CPCPP-DPS. Questions may be directed to: compliance@dealerprofit.com. OSHA Releases Guidance on Mitigating, Preventing Spread of COVID-19 in the WorkplaceWASHINGTON, D.C. — January 29, 2021 — In response to President Joe Biden’s January 21 executive order on worker health and safety, the Occupational Safety and Health Administration (OSHA) issued new recommendations and mandatory safety and health standards for employers. These recommendations create no new legal obligations for employers. The executive order also tasks OSHA to review whether it should issue nationwide workplace standards which would carry legal obligations for employers. This would be due by March 15.
The guidance states that every employer should implement a COVID-19 prevention program. The 15 suggested instructions, including assessing your business for potential hazards, isolating workers, and cleaning and disinfecting workplaces, are copied below. The release in its entirety can be reached here. Please reach out to MRAA’s government relations manager, Adam Fortier-Brown, at adam@mraa.com with any questions.
“The Roles of Employers and Workers in Responding to COVID-19
Under the OSH Act, employers are responsible for providing a safe and healthy workplace free from recognized hazards likely to cause death or serious physical harm.
Implementing a workplace COVID-19 prevention program is the most effective way to mitigate the spread of COVID-19 at work.
The most effective COVID-19 prevention programs engage workers and their representatives in the program’s development and implementation at every step, and include the following elements:
In addition, a best practice is to create and test two-way communication systems that workers can use to self-report if they are sick or have been exposed, and that employers can use to notify workers of exposures and closures, respectively.
In addition, ensure that workers understand their rights to a safe and healthful work environment, whom to contact with questions or concerns about workplace safety and health, and their right to raise workplace safety and health concerns free of retaliation. This information should also be provided in a language that workers understand. (See Implementing Protections from Retaliation, below.) Ensure supervisors are familiar with workplace flexibilities and other human resources policies and procedures.
Once the area has been appropriately disinfected, it can be opened for use. Workers without close contact with the potentially infected person can return to the area immediately after disinfection.
If it is more than 7 days since the infected person visited or used the facility, additional cleaning and disinfection is not necessary. Continue routine cleaning and disinfection, described below.
Note: Performing screening or health checks is not a replacement for other protective measures such as face coverings and physical distancing. Asymptomatic individuals or individuals with mild non-specific symptoms may not realize they are infected and may not be detected during through screening.
In addition, employers should be aware that reprisal or discrimination against an employee for speaking out about unsafe working conditions or reporting an infection or exposure to COVID-19 to an employer or OSHA would constitute a violation of Section 11(c) of the Act. In addition, 29 CFR 1904.35(b) also prohibits discrimination against an employee for reporting a work-related illness.
In addition to notifying workers of their rights to a safe and healthful work environment, ensure that workers know whom to contact with questions or concerns about workplace safety and health, and that there are prohibitions against retaliation for raising workplace safety and health concerns or engaging in other protected occupational safety and health activities (see educating and training workers about COVID-19 policies and procedures, above); also consider using a hotline or other method for workers to voice concerns anonymously.
Correct Craft Announces Dee Ann Turner as Culture Summit Keynote SpeakerORLANDO, FL (January 27, 2021) – This year’s Marine Industry Culture Summit, presented by Correct Craft will host as its keynote speaker Dee Ann Turner. The two-time bestselling author and 33-year veteran at Chick-fil-A will speak on the secret recipe for a remarkable culture. Bill Yeargin, CEO of Correct Craft stated, “There could not have been a better addition to our Marine Culture Summit than having Dee Ann Turner as our keynote speaker this year. She understands the importance of culture and has implemented cultures that have a positive impact throughout her career.” Yeargin added, “We are excited about this year’s Marine Culture Summit. In the first few hours after we announced it we received three times the number of registrations as we had last year. We expect this to be a very impactful afternoon that will make the marine industry better. We are excited to be able to present this opportunity to our friends in our industry.” Those who drive organizational culture are invited to register and learn how to communicate values to employees and stakeholders, and what to do to ensure your organization is operating at its fullest potential. Along with Turner, attendees will hear from Bill Yeargin CEO of Correct Craft on culture as he reviews last year and sets the stage for another year of culture improvement. Shirley Adams will share how to apply organizational learning from experience in implementing Correct Craft University. The summit will conclude with a panel discussion with Bill Yeargin, Duane Kuck, CEO of Regal Boats, and Kris Carroll, President of Grady White on culture and how the events of the pandemic have shaped their organizations. After the response to last year’s Marine Culture Summit and the success that followed, Correct Craft’s second summit will be online on March 3rd from 2:00 – 4:00 p.m. EST. To register for the Marine Culture Summit, please go to www.marineculturesummit.com. About Correct Craft: Celebrating 96 years of excellence in the marine industry, Correct Craft is a Florida-based company with global operations. Focused on “Making Life Better,” the Correct Craft family includes Nautique, Centurion, Supreme, Bass Cat, Yar-Craft, SeaArk, Parker, and Bryant boat companies, Pleasurecraft Marine Engine Group, Watershed Innovation and Aktion Parks. For more information please visit www.correctcraft.com. |