PPP Deductibility Included

Click here for a detailed summary.

On Dec. 18th, Governor Kevin Stitt issued the following

statement after the Oklahoma State Board of Equalization certified an estimate

indicating lawmakers will have $8.4 billion to build a budget for the 2022 fiscal year, which begins July 1, 2021.

“Over the course of this past fiscal year, Oklahoma’s state revenues have

dropped due to the impact of the historic COVID-19 pandemic, coupled with the substantial loss of oil and gas drilling activity," said Gov. Stitt. "However,

Oklahoma was one of the first states to fully re-open its economy after the onset of the pandemic to allow Oklahomans to operate their businesses and safely return to work. Thanks to this decision, and the effective deployment of the CARES Act Coronavirus Relief Funds to our citizens, businesses, cities and

counties, the Fiscal Year 2021 predictions are coming in better than expected. By these projections, we now believe we will see less than half the revenue losses predicted in April. Moving forward, the Legislature will still have difficult decisions to make regarding the budget, but my team is committed to working alongside our legislators to ensure we remain fiscally responsible with

Oklahomans’ hard earned tax dollars."

During the meeting, Gov. Stitt gave attention to one-time cash sources of $1.03

billion as part of the spending authority estimate that will not be available in FY 2023 and does not bring the State back to its previously projected pre-pandemic levels.

The Board of Equalization will return in February to certify a final estimate on how much revenue lawmakers will have to build a budget during the upcoming legislative session.

Click HERE to view the Budget Packet.

The FMCSA has extended its waivers for renewal of CDL licensure, CDL learner’s permits and driver medical examinations and certificates that expired on or after March 1, 2020. The waiver is now extended through February 28, 2021. The FMCSA is also extending the waiver allowing state licensing agencies to not downgrade driver status due expiring or expired CDL licenses, permits, medical examinations and certificates through February 28, 2021. Drivers are only covered by the FMCSA waivers for CDL licenses and learner’s permit if their respective state licensing agency also adopts the waivers. The waiver for medical certificates and medical exams apply automatically. The waivers are not valid for CDL licenses, learner’s permits, and medical certificates expiring before March 1, 2020. The FMCSA waiver can be downloaded here. The TSA has not yet extended the waiver for driver hazardous material endorsements (HMEs) that expire on December 31, 2020. EMA is working with TSA to issue an extension for HMEs.

Earlier this month, the EPA issued a final rule that seemingly increases the fungibility of distillates by allowing downstream distributors to redesignate 15 ppm heating oil, kerosene, and jet fuel as ULSD for use in motor vehicles and non-road, locomotive and marine engines. Under the final Fuels Regulatory Streamlining rule, downstream distributors redesignating ULSD are allowed to rely on product transfer documents provided by upstream parties to certify redesignated product rather than go through elaborate EPA sample, testing and certification requirements. The EPA said in the final rule that “We expect that these changes will simplify the diesel fuel programs, resulting in reduced burden associated with demonstrating compliance with the sulfur standards and maximize the fungibility of diesel fuel, allowing the market to operate more efficiently. These changes are not expected to change the stringency of the diesel fuel and IMO marine fuel standards.” Taken alone, the final rule would essentially make 15ppm ULSD fully interchangeable with heating oil, kerosene and jet fuel below the terminal rack, providing greater flexibility for heating oil dealers.

However, the Fuels Regulatory Streamlining Rule must be read together with the EPA’s 2020 RFS Standard final rule to fully understand downstream ULSD fungibility. The 2020 RFS rule issued in February actually restricts the ability of downstream parties to redesignate ULSD and eliminates downstream fungibility of 15 ppm distillate fuels created under the Fuels Regulatory Streamlining rule. The RFS rule restricts distillate fungibility by requiring downstream distributors who redesignate ULSD to register as obligated parties under the RFS, a move that would impose onerous blending, recordkeeping and reporting requirements heretofore limited to refiners and terminal operators. The EPA added this requirement to prevent upstream parties from designating ULSD volumes as RFS exempt “non-transportation diesel fuel” only to have downstream parties redesignate it as “transportation fuel” that is subject to RFS. Redesignation in this manner would remove ULSD volumes from RFS requirements with no mechanism for recapture downstream. Requiring downstream parties who redesignate distillates to comply with the RFS, recaptures volumes taken out or added to the RFS through redesignation. The RFS rule also prevents downstream distributors from redesignating 15 ppm heating oil as transportation fuel for the same reason. The bottom line is that heating oil dealers will not be able to redesignate diesel fuel to heating oil and vice-versa when the Fuels Regulatory Streamlining rule goes into effect on January 1.

The IRS has issued the 2021 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business. Beginning on Jan. 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

The standard mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. However, taxpayers have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Taxpayers can use the standard mileage rate but must opt to use it in the first year the car is available for business use. Then, in later years, they can choose either the standard mileage rate or actual expenses. Leased vehicles must use the standard mileage rate method for the entire lease period (including renewals) if the standard mileage rate is chosen.

Notice 2021-02 contains the optional 2021 standard mileage rates, as well as the maximum automobile cost used to calculate the allowance under a fixed and variable rate (FAVR) plan. In addition, the notice provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in calendar year 2021 for which employers may use the fleet-average valuation rule in or the vehicle cents-per-mile valuation rule.

Employers need to understand the rules on mandating the COVID-19 vaccine for its workforce. While an employer can require its employees to get the vaccine before returning to work, several exceptions exist. The two major exceptions are for employees with ADA disabilities and employees with sincere religious beliefs. Employees represented by unions may also have additional protections.

Click here for more information from Paley Rothman, counsel to the Small Business Legislative Counsel (SBLC).

Last Monday, the Advisory Committee on Immunization Practices (ACIP) updated interim vaccine allocation recommendations. In Phase 1b, COVID-19 vaccine should be offered to persons aged =75 years and non–health care frontline essential workers, and in Phase 1c, to persons aged 65–74 years, persons aged 16–64 years with high-risk medical conditions, and essential workers not included in Phase 1b.

ACIP has classified the following non–health care essential workers as frontline workers: first responders (e.g., firefighters and police officers), corrections officers, food and agricultural workers, U.S. Postal Service workers, manufacturing workers, grocery store workers (includes convenience stores), public transit workers, and those who work in the education sector (teachers and support staff members) as well as childcare workers. Essential worker sectors recommended for vaccination in Phase 1c include those in transportation and logistics, water and wastewater, food service, shelter and housing (e.g., construction), finance (e.g., bank tellers), information technology and communications, energy, legal, media, public safety (e.g., engineers), and public health workers. Petroleum marketers without a convenience store are categorized under Energy and are included in Group 1c’s “essential workers not included in the second phase of vaccination.” Although states generally follow the CDC’s guidelines, each creates its own plan to deal with situations unique to each state. For more information, click here and here. 

The IRS has assured EMA that the claim payment processing backlog for motor fuel excise tax refunds, and biodiesel blender, alternative fuel mixture and alternative fuel use credits will be resolved by January or February at the latest. EMA has received numerous complaints from marketers over the past six months concerning the accumulation of unpaid IRS claims owed, often reaching into the hundreds of thousands of dollars. Continuing to float the unpaid claims is creating unnecessary financial hardship for many marketers. As a result, clearing up the claim backlog has been a top priority for EMA. EMA has been pressuring the IRS to clear up the backlog since it began last April. Unfortunately, the IRS has not been forthcoming about the extent of the backlog or plans to eliminate it.

In an effort to get definitive answers, EMA enlisted the help of the Senate Finance Committee to pressure the IRS to address the growing backlog. As a result, the IRS finally responded this week with a plan to quickly clear up the processing backlog. According to the IRS, the backlog is due to the disruption in normal work hours and loss of personnel caused by COVID-19. The IRS said that motor fuel excise tax and renewable fuel credit claims filed electronically have been processed in a timely manner throughout the COVID-19 period. However, paper filings requiring hand processing remain backlogged. In order to clear up the backlog the IRS said it will introduce an electronic means of processing paper claims sometime in January or early February. Once electronic processing of paper claims is initiated, the IRS expects overdue payments to be processed quickly and the backlog eliminated. EMA will continue to work with the Senate Finance Committee to ensure that IRS follows through with expedited processing of paper claims and that marketers receive payment for overdue claims as quickly and efficiently as possible.

In the meantime, marketers are advised to file all new refund and credit claims electronically to ensure timely processing. Electronic filing directions are found in the instruction sections of all IRS claim forms. Also, the IRS is required to pay interest on all electronic claims not processed within 20 days of receipt and on paper claims after 45 days. The rate paid is the federal short-term rate (set quarterly) plus three percent compounded daily. The IRS told EMA that checks for payment of backlogged claims will not include interest payments covering the processing delay period. Instead, those payments will follow in a separate check once the claim backlog is cleared. 

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