Ingfbruno / CC BY-SA

March 25, 2020; New York Times

“As with any complex piece of legislation, this one will create winners and losers,” report Eric Lipton and Kenneth Vogel in the New York Times.

A near-final, 880-page version of the bill reveals some details that largely escaped scrutiny but which speak to some of the specific provisions sought and obtained in the Coronavirus Aid, Relief, and Economic Security Act (CARES) bill, the single largest economic stimulus bill in US history. The bill passed unanimously by the US Senate and is expected to be reviewed and shortly approved by the US House of Representatives.

Lipton and Vogel report that, “Restaurants and retailers will get a tweak to federal tax law they have been seeking for more than a year that could save them $15 billion.”

For example, page 15 of the bill contains the following provision:

BUSINESS CONCERNS WITH ONE MORE THAN 1 PHYSICAL LOCATION: During the covered period, any business concern that employs more than 500 employees per physical location of the business concern and that is assigned a North American Industry Classification System code beginning with 72 at the item of disbursal shall be eligible to receive a covered loan.

To understand this clause, it may be helpful to know that NAICS (North American Industrial Classification) section 72 is the standard classification for hotels and restaurants. Typically, under US federal law, a “small business” is a business that employs 500 people or less. But the terms of the above provision, Lipton and Vogel explain, mean that, “certain hotel owners, even those employing thousands of people, will be eligible for small-business loans, a provision that could potentially benefit Mr. Trump’s company to help to continue to pay wages for his employees. The Trump Organization could also benefit from the $15 billion change to the tax code won by restaurants and retailers.”

This second provision, called “Technical Amendments Regarding Qualified Improvement Property” (section 2307, page 213 of the bill) allows immediate write-offs of money spent on renovations at hotels or restaurants, instead of having to take the deduction over 37 years. Industry lobbyists, note Lipton and Vogel, have been pushing for the change for more than a year. They claim it is a technical correction to the Republican 2017 tax bill.

Another measure (section 4003 on page 513) sets aside $17 billion for “businesses critical to maintaining national security.” This provision, according to Lipton and Vogel is “a category seen as intended at least partly for Boeing, the troubled aircraft manufacturer and Pentagon contractor, whose name appears nowhere in the bill.”

Nonprofits benefit too from some stimulus bill provisions, although the scale of nonprofit set-asides was comparably modest. The Senate bill, for instance, provides the John F. Kennedy Center for Performing Arts with $25 million and the Smithsonian Institute $7.5 million. Additionally, both the National Endowment for the Arts and the National Endowment for the Humanities get $75 million to fund grants to arts organizations, museums, and libraries during the pandemic.—Steve Dubb