HomeGovernmentNearly 100 U.S. Representatives Seek Tax-Free Status for CERTS Program Funds

Nearly 100 U.S. Representatives Seek Tax-Free Status for CERTS Program Funds

Democrat congressional representatives are pushing Congress to grant tax-exempt status to school bus and motorcoach companies that received Coronavirus Economic Relief for Transportation Services (CERTS) Act funds.

Reps. Darrin LaHood of Illinois and Jimmy Panetta of California spearheaded a letter also signed by 91 of their associates on Monday, asking Speaker of the House Nancy Pelosi and Minority Leader Kevin McCarthy to consider a proposal to exempt the $2 billion in CERTS grants from federal taxation.

The letter notes that the $953 billion Paycheck Protection Program, the $16.2 billion Shuttered Venues Operators Grant, and the $28.6 billion Restaurant Revitalization Fund grants are non-taxable.

“We believe this was an oversight and request your support for aligning the tax treatment of the relief provided to the covered CERTS industries with that provided [to] other similarly impacted sectors,” the letter states. “These funds were intended to be emergency relief and should be treated the same as other coronavirus relief funds, which are exempt from tax while preserving the ability to deduct business expenses. This clarification would help simplify tax compliance for our member companies, many of which are small and family businesses, as well as provide parity with other industries.”

The letter also notes that private school bus, motorcoach and passenger vessel carriers for which the CERTS Act was created were the first operations to shut down in March 2020, “and will be among the last to fully recover.” The National School Transportation Association (NSTA) estimated in the spring that school bus companies alone lost $8 billion in revenue during the height of the pandemic. But the CERTS program ended up only covering about 20 percent of those lost revenues.

Monday’s letter to Pelosi and McCarthey also points out that many operators do not expect to return to “normal” business until sometime in 2023.

“Requiring these struggling businesses to pay back a large portion of these emergency grants in taxes will further delay their recovery,” the letter adds.

Related: COVID-19 Funding Relief Finally Coming for Private School Bus, Motorcoach Industries
Related: CERTS By the Numbers: How Treasury Divided Up $2B
Related: CERTS Act Becomes Law

NSTA along with partners the United Motorcoach Association (UMA), the American Bus Association, and the Passenger Vessel Association originally asked Congress to approve $8 billion for the CERTS program, but the Consolidated Appropriations Act of 2021 enacted last December only included the current amount. The CERTS Coalition asked for $40 billion in new CERTS funding in February, and UMA launched another effort in August for an additional $6 billion. But neither attempt has succeeded to date.

Meanwhile, the U.S. Treasury Department, which administers the program, did not release the original program funds until late June. Over 5,000 companies were eligible to apply for grants.

NSTA said on Wednesday NSTA said on Wednesday it applauds the latest congressional effort to ease the burden being carried by private operators.

“NSTA greatly appreciates the efforts of Reps. LaHood and Panetta on their support of private student transportation providers. Their leadership is critical as private operators continue to gain their footing during this turbulent recovery,” said NSTA President Carina Noble, who is also the senior vice president of communications and external affairs for school bus contractor National Express.

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