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Credits for Safer Workplaces Wait on Congress

Posted on May 21, 2020

A wish list of tax credits for capital expenditures used to make the workplace safer and to restructure stores and hotels will have to wait as lawmakers struggle to create another coronavirus relief package.

The American Hotel & Lodging Association (AHLA) wants Congress to encourage travel by providing a host of credits to help offset costs. Among them is a credit for hotels to comply with guidelines for providing guests with personal protective equipment and increasing cleaning requirements.

In a May 20 letter to congressional leaders, the association said that hotels will need help in their quest to make guests feel safe and to make their properties cleaner. Hotels and other industries in the leisure sector have been especially hard hit by the economic downturn caused by the COVID-19 pandemic.

The Bureau of Labor Statistics estimates that the leisure and hospitality sector lost 7.7 million jobs in April. “It's going to be a whole new world with regard to investments and improvements,” Dave Koenig, vice president of tax at the Retail Industry Leaders Association (RILA), told Tax Notes.

Although most retailers are selling products online, many have closed their doors to customers or are providing curbside services. Koenig said that some RILA members would benefit from a tax credit to improve their stores by creating physical barriers between employees and customers.

It may be too soon to discuss what stores may need once the economy is back in full swing, Senate Finance Committee Chair Chuck Grassley, R-Iowa, told Tax Notes May 20. “I wouldn't make that decision until we get well into June and start making decisions about what's going to be in the next care package,” he said.

The AHLA said it is backing the bipartisan Jumpstarting Our Businesses' Success (JOBS) Credit Act of 2020 (H.R. 6776), sponsored by House Ways and Means Committee member Stephanie N. Murphy, D-Fla. The act seeks an expansion of the employee retention credit, something that was included in the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800).

The AHLA also suggests a credit to encourage Americans to engage in more business and leisure travel. Comparing it to the first-time homebuyer tax credit created after the housing crash more than a decade ago, the association said the proposed credit would encourage travel within a specific time frame.

“We are urging Congress to do even more to help the hotel industry so that our small business hotel operators can keep the lights on and retain and rehire employees,” AHLA President and CEO Chip Rogers said in a May 20 statement.

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