BILLIONS IN TAX BREAKS FOR SLUMP
June 8, 2020 - Douglas Myser
Billions in tax breaks for slump. New tax breaks expected to total about $650 billion are starting to flow to U.S. businesses, giving a quick cash infusion and longer term help to ride out the coronavirus induced economic downturn. Companies reported tax deferrals or benefits exceeding $100 million each include fast-casual chain Chipotle Mexican Grill Inc., Walt Disney Co., American Airlines Group Inc. and oil refiners Valero Energy Corp. and Marathon Petroleum Corp. SO far, more than 50 publicly traded companies have disclosed tax savings and deferrals totaling at least $2.8 billion, according to securities filings. Money is also going to private companies that don't report earnings. Billions in tax breaks for slump.
"Depending on the company, the provisions can be really meaningful in getting them to the other side of this," said Manal Corwin, principal in Charge of KPMG LLP's Washington tax practice. The tax breaks enacted in March, are a crucial piece of the governments attempt to prop up businesses during the coronavirus pandemic, alongside Federal Reserve lending and the Small Business Administration's loan forgiveness program. Some other programs spurred controversy over eligibility and over what conditions should be attached to federal money. Companies including AutoNation Inc. and Shake Shack Inc. returned federal money following lawmakers concerns about public comanies getting money aimed for small businesses.
Generally applicable tax provisions are different. They aren't limited by an application process, a dollar cap or specific agency approvals. Instead, they are available broadly to companies meeting the criteria in the law, and they are designed to generate cash quickly. Oil industry companies get money from the tax system while policy makers debate whether they should get lending support. Airlines can get tax refunds on top of grants from a separate Treasury Department program. In all, businesses are likely to get about $650 billion in tax cuts, accelerated deductions and deferred payments in 2020 and 2021, according to the Joint Committee on Taxation.
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