New York, NY This morning, Senate and House leaders and the White House reached agreement on a $2 trillion economic stimulus bill designed to provide relief to individuals, businesses, and state and local governments. Coupled with steps taken by the Federal Reserve, these unprecedented actions are meant to stabilize and prevent any further damage the economy.
The legislation is expected to take the following actions important to the commercial real estate industry:
- Provides a technical correction to the Qualified Improvement Property (QIP) depreciation drafting error from the 2017 Tax Cuts and Jobs Act that resulted in a 39-year depreciation period for QIP, rather than making it eligible for immediate expensing. This correction is a top NAIOP federal priority and its inclusion is a result of our efforts over the last two years.
- Allows 5-year carryback of net operating losses (NOL) for non-REIT businesses for 2018, 2019 and 2020.
- Increases the limitation on deductible business interest from 30% to 50% of EBITDA (earnings before interest, taxes, depreciation, amortization) for 2019 and 2020. Excludes from income the cancellation of debt related to new, emergency small business loans.
- Provides small businesses, many of whom are your tenants, with $367 billion in loan assistance so they can keep employees on payrolls and continue paying obligations.
Additionally, the legislation would provide direct payments to many individuals and families, extend unemployment insurance and shore up social safety net programs.
The House must now vote on the legislation, which is complicated because of the need for Congressional members to travel back to Washington. Passage may instead occur through a "unanimous consent" procedure essentially requiring sign off from each member.
NAIOP's advocacy leadership throughout this difficult time is just one of the many ways the association is supporting members and the entire CRE industry. The legislative team will continue its critical work alongside elected officials and real estate allies to ensure that our industry has a voice in the discussions. Be assured that NAIOP is here to support everyone during these extraordinary times.
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