U.S. Reps Seek Tax-Exemption for CERTS Grants
U.S. Reps Seek Tax-Exemption for CERTS Grants

Further relief could be on the way for private school bus contractors if a bipartisan move in Congress successfully provides tax exemptions for federal support funds awarded during the COVID-19 pandemic.

The Coronavirus Economic Relief for Transportation Services (CERTS) Act was enacted in December 2020 to bolster school bus, motorcoach, and passenger vessel industries affected by the pandemic.

In a letter to U.S. House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy, Congressmen Jimmy Panetta (D-Calif.) and Darin LaHood (R-Ill.) noted that while grants from the Paycheck Protection Program (PPP) and Restaurant Revitalization Fund (RRF) were made non-taxable, CERTS grants were not.

“We believe this was an oversight and request your support for aligning the tax treatment of the relief provided to the covered CERTS industries with that provided other similarly impacted sectors,” they wrote in the letter, which was co-signed by dozens of other members of Congress. “These funds were intended to be emergency relief and should be treated the same as other coronavirus relief funds, which are exempt from tax while preserving the ability to deduct business expenses.”

Panetta and LaHood wrote that the clarification would simplify tax compliance and provide parity for these essential transportation services.

“The CERTS Act grants, while extremely beneficial, only replaced about 20% of lost revenue from 2020,” the letter stated. “With the Delta variant leading many commuters and travelers to stay at home, the economic impacts on these industries will be prolonged. Many operators do not expect to return to ‘normal’ business until sometime in 2023.”

Under the CERTS program, the U.S. Treasury Department provided up to $2 billion in grants to companies that experienced an annual revenue loss of at least 25 percent due to COVID-19. The grants were intended to cover payroll costs, but also could be used for – among other things - acquisition of services, equipment, maintenance, rent, and insurance.

According to a Treasury report released last month, top pupil transportation recipients of CERTS grants included:

  • FirstGroup Investment Corporation: $205,653,341
  • National Express Holdings: $113,206,223
  • Spinner US AcquireCo: $51,513,973
  • DATTCO, Inc.: $17,736,760
  • Cook Illinois Corporation: $14,485,187
  • George Krapf Jr. and Sons, Inc.: $13,494,570

In a news release, the National School Transportation Association (NSTA) indicated that private school bus operators “provide nearly 40% of the nation’s school bus service in nearly 200,000 yellow school buses and providing employment to almost 380,000 workers.”

The CERTS program, the release stated, gave funds that were desperately needed to keep those buses rolling.

“In addition to home-to-school service, school bus operators provided essential services to schools throughout the country during the 2020-21 school year, and the CERTS program helped support those efforts,” the NSTA release said.

Carina Noble, NSTA president and senior vice president of communications and external affairs for National Express, said the organization welcomes the congressional assistance.

“NSTA greatly appreciates the efforts of representatives LaHood and Panetta on their support of private student transportation providers,” she said. “Their leadership is critical as private operators continue to gain their footing during this turbulent recovery.”

Curt Macysyn, NSTA’s executive director, agreed: “Representatives LaHood and Panetta have been consistent leaders in providing initial impetus for the CERTS Act last year, and they continue to support transportation providers in advocating for this proposal. Private school bus operators are grateful for the support this measure has so far garnered on Capitol Hill, and we look forward to a successful outcome.”

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