On Dec. 21, the U.S. Senate and House of Representatives overwhelmingly passed a $900 billion COVID-19 relief bill. On Dec. 27, President Trump signed it and it is now law.
For the Paycheck Protection Program (PPP), this measure overturns the IRS position that makes PPP proceeds taxable. Thus, the income derived as a result of PPP forgiveness will not be taxable.
The law contains the following PPP provisions:
It repeals the requirement that PPP borrowers must deduct the amount of any Economic Injury Disaster Loan (EIDL) advance from their PPP forgiveness amount. At this point it is not clear how those who have already applied and have been approved for forgiveness will go back and have the EIDL advance forgiven.
In addition, there will be a new round of PPP loans. To be eligible for a second PPP loan, the following must apply: Firms must have 300 or fewer employees; firms who have an existing PPP loan must have used or must use the full amount of their first PPP loan; and firms must show a 25 percent gross revenue decline in any 2020 quarter compared with the same quarter in 2019.
The COVID-19 relief bill clarifies that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.”
While the CARES Act excluded PPP loan forgiveness from gross income, it did not specifically address whether the expenses used to achieve that loan forgiveness would continue to be deductible. In April, the IRS issued Notice 2020-32, which stated that no deduction would be allowed under the Internal Revenue Code for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a PPP loan.
In November, the IRS then expanded on this position by issuing Rev. Rul. 2020-27, which held that a taxpayer computing taxable income on the basis of a calendar year could not deduct eligible expenses in its 2020 tax year if at the end of the tax year the taxpayer had a reasonable expectation of reimbursement in the form of loan forgiveness on the basis of eligible expenses paid or incurred during the covered period.
Several business trade organizations disputed this interpretation of the CARES Act loan forgiveness rules, arguing that it was not Congress’s intent to disallow the deduction of otherwise deductible expenses.
Congress has now agreed with that position and the law has been changed.
As always, review this information with your tax and accounting advisor.
As Head Harvester, with the Harvest Landscape Consulting Group, Fred Haskett coaches green and white industry owners. He is also a frequent Snow Magazine contributor.
Monkey Business
Make 'Em Laugh
If you're struggling with improving your leadership abilities, then try adding a little humor to your repertoire.Biz coach Chad Storlie offers five examples on how to make this work for you.
At the end of a career, military members like to remember their skill, tactical acumen, deployments, and the great military members that they led. As a retired Army officer, I was once a Second Lieutenant, the lowest grade of officer, in the Infantry, the skilled, on-the-ground warfighters of the US Army. As a 2nd Lieutenant, I led my soldiers, but I also led them in laughing at my mistakes and misadventures.
Military life is filled with incredible humor. 99.999% of military humor is inspired either directly or indirectly by junior military officers, specifically Ensigns (Navy and Coast Guard) and Lieutenants (Army, Marines and Air Force). The misadventures of these junior officers as they simultaneously learn to lead, learn the military, and learn what their jobs truly are serve as an amazing resource for timeless humor. They also serve as an amazing training ground for life lessons.
My military career began in the Republic of Korea (ROK) as a US Army 2nd Lieutenant in the early 1990’s. I did my part as a young 2nd Lieutenant and provided my platoon a lifetime of mistakes, screw ups, and misadventures to fuel their stories for a lifetime. On one of my first field training exercises with my 4.2-inch Mortar Platoon, I asked several of my soldiers to take my camera and photograph their jobs from their perspective. The fact that I handed a $100 camera with extra film to several smiling enlisted soldiers proved for the last time that I was a terribly, terribly naïve young officer. A week later, they handed me the camera back, a bill for some extra film (I was overcharged of course), and I received a great life lesson.
Help with the Worst Jobs On the camera were all the jobs in the field that the soldiers hated the most. Digging fighting positions, filling sandbags, handling mortar misfires, waiting in line for chow, not enough coffee, and standing guard. This was a great lesson for me because this told me that these were all the tasks that I should help the platoon perform. For the rest of my time, I sought out the worst jobs, filled sandbags, and stood next to the crews while they handled a misfire.
Lead by Example – Always! There were also pictures of me looking less than stellar. In the pictures, my chinstrap was unfastened, I was wearing a completely unauthorized Marine Corps sweater that was great in the Korean winter, and another with me about five feet from my rifle - an Infantry "No No." The US Army of the 1990’s lived by buttoned Kevlar helmets, snapped field gear, and your weapon within arm’s reach. Of course, my platoon had pictures of me not doing this, even if it was only once. Leadership by example is only leadership by example if you always do it and do it all the time.
Ask for Help I thought that the next three pictures on the roll of film was a mistake. It pictured a Korean farmhouse three separate times as it became progressively dark. The real story of the pictures is that I was lost and did not want to tell the Platoon, especially the Platoon Sergeant. So, instead, I rolled by our next position four times and everyone in the platoon knew that we should stop. Correction, everyone but me knew that we should stop. It always benefits a leader to engage the entire team in helping make and perform a plan, even if you do not think you need the help. Great leaders ask their team, repeatedly, and ahead of time, what their team’s opinions are to create an even better plan. Let us just say I do this now.
Get Some Sleep One of the funniest things is watching a sleep deprived Lieutenant issue orders and fall asleep while they are doing it. Initially, I felt that I needed to be awake all the time to ensure that my platoon performed. My Sergeant’s felt this was a fine idea and they got sleep for about three days until a Private found me sitting against an armored vehicle first asleep, probably with my chin strap unbuttoned, I am sure. Leaders need to realize that when they make a mistake, they affect the success of hundreds and not just themselves. I learned that nutrition, rest, and exercise made me a better leader and if I wanted to make good decisions for my team, I needed to take care of myself and trust others to help me operate the platoon.
Take One for The Team On one of my final exercises, my Commander ordered that every soldier would be with sleeves down on their uniforms, Kevlar helmets on, and all equipment buckled. This was a great idea, except that it was August when Korea is over 100 degrees and humidity hangs like a sweltering invisible fog. Hours later, I was having a conversation with my Battalion Commander on the side of a road with my platoon racing by dressed only in T-shirts and soft caps. Naturally, I was yelled at (“lit up” in military parlance) for 30 minutes like the Times Square Christmas tree by my Battalion Commander. Returning to my platoon, they braced for chew out session that never came. Sometimes, all you can do is protect your team.
The final picture on the roll is two of my most junior soldiers giving me a “traditional” one-finger salute. I love this picture because it showed that I was a successful as a leader. I was trying to create a powerful sense of initiative, a fighting spirit, a sense of personal pride and accomplishment in the platoon. In the Army, a willingness to “own your disrespect” is a sign of pride, initiative, and audacity – exactly what I wanted to create.
I helped create a unit of soldiers that were confident and proud. The soldiers helped create a leader that would always remember to help with the worst jobs, lead my example, ask for help, take care of themselves, and always support the team in front of their boss. I was fortunate to be promoted several times in my career, but I will always remember my time and its fortunate lessons as an Army 2nd Lieutenant.
Chad Storlie is a retired US Army Special Forces officer, an Iraq combat veteran, and has 15 years university teaching experience as an adjunct Professor of Marketing. He is a mid-level B2B marketing executive and a widely published author on customer experience, leadership, marketing, business, analytics, decision making, military and technology topics.
Winter Equipment
Notebook: Winter Equipment Debuts Vulcan V-Plow System
Vulcan steel is reinforced with carbide matrix hard-facing weld, increasing cutting edge efficiency, while reducing damage from rough roads and obstructions.
Winter Equipment offers its Vulcan V-Plow cutting edge system that features Winter Carbide Matrix for superior curb and snowplow cutting edge protection.
Winter Equipment’s Vulcan V-Plow system is a complete system featuring two, 5/8-inch steel cutting edge sections, two nose and two curb PlowGuards made of A22 proprietary steel and high-quality, Grade 8 hardware that inhibits loosening over time.
All the Vulcan steel is reinforced with carbide matrix hard-facing weld, increasing cutting edge efficiency, while also reducing damage from rough roads and unseen obstructions. Additionally, cutting edges and PlowGuards work in tandem to protect and reduce uneven and premature wear, eliminating in-season blade changes and greatly reducing downtime. Slotted mounting holes on the Vulcan nose guards allow for horizontal adjustments and the ability to fit multiple punch patterns.
Intended for use on city streets and parking lots, the Vulcan system is compatible with Western, Fisher and SnowEx plow models, and additional models are planned.
“Our Vulcan system provides contractors with the same durability and longevity of commercial solutions,” said Kent Winter, founder and CEO, Winter Equipment. “A plow that is broken or damaged is a plow that’s not making its owner any revenue, and in a one-plow operation, that’s fatal. Our Vulcan system can pay for itself in just a couple seasons with greater uptime, while increasing efficiency because of our superior design.”
Winter Equipment’s Vulcan system comes with a satisfaction guarantee, ensuring that if the product’s wear system does not perform or last as long as promised, the company will work with its customers until satisfied. The system comes ready to mount with all parts, hardware, and installation directions. The system can be ordered through Winter’s distributor system or by visiting: http://winterequipment.com/shop/systems/vulcan.
CLICK HERE to watch a video about the Vulcan system.
Thermodynamic Solutions
Anatomy of a Nor’easter
What goes into this significant real-life weather event often sounds a lot like science fiction. TDS Meteorologist Beth Carpenter separates fact from fiction of this week's major winter event..
If you live in the Mid-Atlantic or Northeast, you’re likely very familiar with the impacts that nor’easters bring to the region. However, many in the Midwest and Plains have never experienced such an event. What is a “nor’easter” and how does it form?
The first step in the development of a Nor’easter is a buckling Polar Jet Stream. When the jet stream “buckles”, it pulls cold air equatorward into the United States and out over the Atlantic Ocean. Cold air then becomes situated over the warm Gulf Stream waters along the East Coast. The colliding air masses (cold, dry air from Canada and warm, moist air from the Atlantic) cause air to rise, and eventually aid in the development of a low pressure system. This low pressure system typically needs to form within 100 miles east or west of the East Coast for a nor’easter to develop.
Next, if upper level conditions are supportive, the low pressure system will continue to strengthen as it travels up the East Coast. As it does, the storm system will develop strong gale-force winds and pull moisture from the Atlantic into the northeastern United States. Because low pressure systems rotate in a counter-clockwise manner, the winds that impact the northeastern United States in these events come from the northeast- thus the name “Nor’easter”.
The constant flow of moisture from the ocean, combined with strong winds and ripe upper level conditions, bring the threat for flooding rains and/or heavy snowfall to the region. Heavily populated areas from Washington D.C. to New York City to Boston are typically impacted by these events- basically along the I-95 corridor. The impacts range from heavy precipitation, to high winds, rough seas, and coastal flooding. The proximity of the low pressure system to the coastline determines who gets these impacts and how intense they’ll be.
Nor’easters are most powerful from September through April due to the greater difference in air masses, but can happen anytime throughout the year. Significant Nor’easters that come to mind include the Blizzard of ’78 and more recently the January 2015 New England blizzard. In these events, 2-3 feet of snowfall was observed.
Nor’easters pose a significant challenge to meteorologists, even at less than 24 hours before the storm. The exact track of the low pressure system and proximity to the coastline have significant impacts on precipitation types, amounts, and locations. There’s typically also a very sharp rain/snow cutoff on the south side of the storm, and this area could also see icing. Temperature fluctuations of 1-2 degrees can cause the entire forecast to “bust” or “boom”. Narrow, heavy banding of precipitation can also develop with the support of mid-level frontogenesis and strong upper level energy, which can really add to snowfall totals. Weather models have a hard time picking up when and where this will occur.
The historic nor’easter that impacted the Mid-Atlantic and New England over the past 48 hours had all of these ingredients and more. The low pressure system at the surface was relatively weak for a nor’easter, but the supply of old air and upper level dynamics were very ripe for big snowfall- and that certainly verified! Widespread snowfall amounts of 10-18” occurred across the region, with higher amounts of 24-36” in a swath from north-central Pennsylvania to southern New York and into southern Vermont and New Hampshire. The “winner” for highest snowfall from the storm was Binghamton, New York, where several measurements of 40-44” were observed! At times, NWS employees measured snowfall rates of 6” per hour- an incredibly rare event. Note that the snowfall total image below only includes snowfall through 7am Thursday, and does not include the full event for some areas. Many daily and monthly snowfall records were broken.
CLICK HERE for a summary of the event by NWS Binghamton.
Beth Carpenter is Co-Owner and Meteorologist at Thermodynamic Solutions, and a frequent Snow Magazine contributor.
As this stressful year begins to wind down, snow and ice professionals are just now entering their busy season. Combine the eagerness to close out a harsh year with the excitement of a new snow season, it’s easy to overlook details that could have a major impact on your overall business operations.
I reached out Josh Ferguson, Partner and Co-chair of the Philadelphia office at Freeman, Mathis & Gary LLP and the ASCA’s general counsel, to offer his best tips on what business owners should be doing/checking on/confirming at year’s end to both close out the year and to get the new year off on solid footing.
Pay Attention To The Details
“I am recommending business leadership take time to mind their P's and Q's on documentation,” Ferguson says. “While it may not have the same immediate impact as servicing properties, the long-term ramifications of incomplete or missing documentation could have catastrophic consequences.”
Confirm Insurance Coverage Snow professionals need to affirm that they and every one of their service providers/subcontractors have adequate insurance coverage, Ferguson says.
“The most significant insurance issues which impact coverage for commercial general liability coverage including snow operations and CG 2037 endorsement for completed operations,” he says. “Further, a contractor should make sure policies do not have contractual liability exclusions. Remember, you or your subs often get what you pay for. So, if the price of the policy is too good to be true, a deeper dive is necessary. Gaps in coverage could result in significant financial consequences down the road.”
Sign Off On Preseason Site Work Confirm all preseason site inspections have been completed on all properties and those inspections are properly documented, Ferguson warns.
“Most claims involve some component on site conditions, and it is paramount that those conditions have been documented before the season starts,” he says. “This can give the contractor, its insurance carrier and ultimate defense counsel much of what is needed to contest liability and/or contractual defense and indemnity claims.”
Review Finances If a snow professional has availed themselves of a PPP loan, state, or federal grant, then they should review the status of those monies and the documentation they have for how the funds were used, Ferguson advises.
“Accountants will need this information to assess compliance and tax consequences, and also make recommendations on whether any of the remaining monies should be dispersed within the fiscal year,” he says.
Mike Zawacki is editor of Snow Magazine. You can reach him at mzawacki@gie.net.