While expenses for paid leave are offset somewhat by refundable tax credits in packages of novel coronavirus legislation signed by President Donald Trump recently, the requirements risk absorbing short-term cash flows for businesses, the American Staffing Association and National Automobile Dealers Association said in letters to the U.S. Treasury Department. It's unlikely that tax refunds compensating for paid leave expenses will be timely enough to ensure staffing organizations and automobile dealers can keep up with short-term costs such as staffing, both groups said in their correspondence.
In its letter dated March 16, the American Staffing Association said Treasury should create a mechanism to expedite tax relief offered in the legislation. The National Automobile Dealers Association echoed those arguments, and said in its letter dated March 21 that businesses should be able to use all the money set aside to pay taxes for providing paid leave to employees.
The dealership organization also argued that Treasury should offer further tax deadline relief.
Others have expressed concerns surrounding business cash flow amid the fallout from the novel coronavirus pandemic. In his own letter released Wednesday, Rep. John Curtis, R-Utah, advocated for payouts to businesses that can't wait to receive tax credits. In addition, chief executive officers from the Business Roundtable urged some form of payroll tax relief to maintain liquidity.
The Families First Coronavirus Response Act
provides refundable tax credits to compensate for paid family and paid sick leave under the legislation, while the Coronavirus Aid, Relief and Economic Security Act , signed by Trump on Friday, also offers tax credits to businesses that are partly or fully shut down because of the pandemic but continue to pay wages and health care expenses. --Editing by Neil Cohen.
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