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House bill proposes $25,000 tax credit for businesses purchasing PPE

ADA sends letter to subcommittee asking members to support small business dentist owners through tax breaks, credits

September 15, 2020

By Jennifer Garvin

Washington — A House bill is calling for a $25,000 tax credit for businesses, including dental practices, purchasing personal protective equipment to reduce the risk of COVID-19 transmission.

HR 7216, the Small Business Personal Protective Equipment Tax Credit Act, would give small businesses a tax credit up to $25,000 for the cost of qualified personal protective equipment such as gloves, medical masks, N95 respirators, eye protection, gowns and aprons, and cleaning products, as well as the retrofitting or installation of equipment. Nonprofit organizations and Tribal businesses would also be eligible for the credit in a taxable year.

In a Sept. 10 letter to leaders of the House Ways and Means Subcommittee on Select Revenue Measures ahead of its “Consequences for Inaction on COVID Tax Legislation” hearing, the ADA said it supports HR 7216 and said the bipartisan bill would provide a “much-needed tax credit” for the purchase of PPE. The Association also asked lawmakers to pass several other tax-related bills to assist dental practices in recovering from the economic impact of the pandemic.

“At a time when dental practices are trying to overcome the economic downturn caused by COVID-19, the failure of Congress to act on COVID tax legislation hinders dentists’ ability to continue practicing in the midst of the pandemic,” wrote ADA President Chad P. Gehani and Kathleen T. O’Loughlin.

Drs. Gehani and O’Loughlin pointed to the new costly infection control procedures and enhanced personal protective equipment dentists are utilizing to safeguard their patients and staff from the spread of COVID-19 as a key reason many dental businesses would benefit from HR 7216.

“This bipartisan bill would provide a much-needed ($25,000) tax credit for the purchase of PPE intended to reduce the risk of COVID-19 transmission for small businesses,” and “greatly help to mitigate the increased cost of PPE,” they wrote.

The ADA also asked the subcommittee to support the following COVID-19 tax bills:

• HR 7819, the Eliminating the Provider Relief Fund Tax Penalties Act. This bill would ensure that dentists, regardless of taxpaying status, will not be subject to taxes on aid provided through the Provider Relief Fund. By guaranteeing that relief funds do not add to the provider’s tax bills, the bill would allow dental practices to utilize the full value of the benefit.

• HR 6776, the Jumpstarting Our Businesses’ Success Credit Act — known as the JOBS Credit Act. This bill would help dental offices to retain and rehire their employees and would build on the Employee Retention Tax Credit provision in the Coronavirus Aid, Relief, and Economic Security Act. The JOBS Credit Act would include a number of policy enhancements, such as an expanding the credit percentage from 50% to 80% of qualified wages; increasing the per-employee limitation from $10,000 for all calendar quarters to $15,000 per calendar quarter (and an aggregate of $45,000 for all calendar quarters); a phased-in credit, which will allow employers with more than a 20% decline in gross receipts to be eligible for a portion of the credit; and improved coordination between the Employee Retention Tax Credit and the Paycheck Protection Program.

• HR 7032, the Skills Renewal Act. This bipartisan bill would provide Americans who have been laid-off or furloughed as a result of COVID-19 a $4,000 tax credit to pursue post-secondary skills training and credentials.

• HR 6821, the Small Business Expense Protection Act. This bill would correct a “misinterpretation” of the Coronavirus Aid, Relief, and Economic Security Act to allow small businesses to deduct eligible expenses paid with a forgiven Paycheck Protection Program loan from their taxes.

For more information about the ADA’s advocacy efforts during COVID-19, visit ADA.org/COVID19Advocacy.