ASAE Asks for Guidance on 501(c)(6) Access to PPP
In a letter to administration officials, ASAE welcomed long-sought COVID-19 aid for 501(c)(6) associations provided in the year-end stimulus legislation, but asked for clarification of eligibility for Paycheck Protection Program loans.
ASAE has asked the Trump administration for swift guidance implementing the year-end COVID-19 stimulus law that will enable as many 501(c)(6) organizations as possible to access relief programs such as the Paycheck Protection Program (PPP).
The legislation expands PPP access to include 501(c)(6) organizations with 300 or fewer employees, 15 percent or less in lobbying activities and receipts, and less than $1 million in spending for lobbying activities.
In a December 22 letter [PDF] to Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) head Jovita Carranza, ASAE President and CEO Susan Robertson, CAE, said the new legislation will provide long-awaited relief for many 501(c)(6) associations. But she stated that regulatory guidance should
- clearly define 501(c)(6) “lobbying receipts” as revenue generated by the nonprofit for the express purpose of financing lobbying activities.
- define “lobbying activities” under the same parameters set by the Lobbying Disclosure Act.
- clarify that the timeframe for PPP qualifying conditions should be the most recent tax year that ended prior to February 15, 2020.
“These necessary steps will help direct essential relief to deserving 501(c)(6) organizations that exist to support every industry and serve as a foundational instrument of American economy, society and democracy,” Robertson said.
SBA has stated that the agency will “allow lenders to rely on certifications of the borrower in order to determine eligibility of the borrower and use of loan proceeds and to rely on specified documents provided by the borrower to determine qualifying loan amount and eligibility for loan forgiveness.”
On Monday, regulators released an interim final rule [PDF] as guidance for first-time PPP applicants and others, but it did not include the clarifications ASAE asked for. ASAE is awaiting more information from SBA specific to the qualifying conditions for 501(c)(6) eligibility.
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