Quick Links to Articles for April 23, 2021

IRS Rule Allows Deductions for Expenses Previously Disallowed Under the PPP Loan Program

Congressional Update 

Biden Administration Considering Reducing Nicotine in Cigarettes 

U.S. DOT Proposes Rule to Restore California’s Right to Set its Own Vehicle Emission Standards

Only Half of Large U.S. Banks Signed Net-Zero Banking Alliance

Fuels Institute Issues Diesel Fuel Quality Recommended Practices Guide

Check Out EMA Journal Anytime Online

Federated Insurance: It’s Your Life

EMA Member Services Spotlight Introducing: EMA Masters – Powered by Meridian 

SBLC Update - Deductions for Business Meal Expenses

EMA Corporate Partner Spotlight Featuring: Renewable Energy Group, Inc. 

On Monday, EMA submitted comments on the EPA’s E15 Labeling and UST compatibility proposed rule. EMA told the EPA that “energy marketers are willing to sell any liquid fuel that is compatible with existing storage and dispensing equipment, as well as the equipment it powers. Unfortunately, sealants, gaskets and other materials used to connect piping to tanks and equipment, release detection and other monitoring equipment, as well as dispensing equipment are not E15 compatible and adding an ethanol compatible pipe dope to an existing pipe connection is not as simple as unscrewing a fitting, adding pipe dope, and replacing the fitting.” 

EMA also highlighted its concerns regarding state tank funds which could be at grave risk of insolvency if there are a significant number of new releases attributable to compatibility. Furthermore, EMA opposed the potential removal of the E15 labeling requirement in the proposed rule due to the ongoing risk of consumer misfuelling and the liability issues misfuelling raises for retailers. Even though the EPA has approved E15 for 2001 and newer vehicles, several automakers have not been willing to amend their warranties to handle blends above E10, therefore, consumers need to know what they are buying. 

EMA urged the EPA to add the following to the current E15 dispenser label, “Check Owner’s Manual for Compatibility with E15” and also voiced concerns with current E15 marketing as “unleaded88.” Click here to read the comments.

The IRS is providing businesses that received a first round Paycheck Protection Program (PPP) loan a way to deduct expenses they could not claim last year. This week, the IRS issued a revenue procedure that provides a safe harbor for certain taxpayers who received a Paycheck Protection Program (PPP) loan between March 26, 2020 and December 27, 2020. The safe harbor applies to taxpayers who were previously unable to deduct otherwise deductible expenses during the covered period due to an IRS ruling that disallowed costs paid from funds forgiven under the PPP program and treated PPP funds as gross income. This meant that not only were normally deductible costs for payroll, interest on mortgage obligations, rent and utilities not allowed, but the forgiven portion of the PPP loan would be taxed as income as well. However, the Consolidated Appropriations Act enacted on December 27, 2020 overturned the IRS ruling and allowed businesses to claim the deductions and treat forgiven PPP loans as taxable income. 

EMA supported the provisions of the Consolidated Appropriations Act that fixed the deductibility and taxable income problems. Under the safe harbor established in the IRS ruling, taxpayers may now deduct the previously disallowed expenses in the immediately subsequent taxable year. EMA will issue a compliance bulletin on this issue next week. 

This week, Senate Republicans announced a $568 billion infrastructure framework that focuses on roads, bridges, water systems, and broadband. The proposal, which Senate Democrats criticized as insufficient, would also impose user fees from drivers of electric, hybrid, and other vehicles not affected by the federal gas tax. 

House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR) announced that he still plans to mark up his infrastructure package by late May, which could ultimately be bundled with other aspects of President Biden’s American Jobs Plan depending on the fate of negotiations. Senator Chris Coons (D-DE), a close ally of President Biden’s, suggested that Democrats and Republicans could agree on a smaller package focused on conventional infrastructure before turning to other more partisan provisions later in the year. Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) even suggested that infrastructure could be broken into as many as four different packages. He called for regular order (not budget reconciliation), and said he opposed a $1 trillion price tag as well as any fees on carbon. Continuing the bipartisan message, Maryland Governor Larry Hogan is hosting an event with a bipartisan group of Senators, Governors, and Representatives to discuss Infrastructure.

President Biden opened his virtual Leaders’ Summit on Climate, a two-day event with 40 world leaders. He announced the United States’ new commitment under the Paris Accords – achieving a 50-52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030. The Biden Administration also announced several new programs to advance EV deployment. The Department of Transportation (DOT) announced its fifth round of “Alternative Fuel Corridor” designations, which denote highways with infrastructure plans to allow for travel on alternative fuels, including electricity. The current round of announcements includes 51 interstates and 50 highways in 25 states. DOT also released guidance clarifying that federal funds are available for EV charging systems on the national highway system. In addition, the Department of Energy announced funding opportunities for researching technologies that reduce the cost of EV supply equipment and accelerate the adoption of commercially available plug-in EVs.

The Biden Administration is considering a FDA proposed rule to reduce nicotine levels in cigarettes to make them no longer addictive as well as whether to outright ban menthol cigarettes in the U.S. by April 29th. Click here for the story. 

The Energy Marketers of America is concerned that such drastic measures could detrimentally impact small business retail fuel outlets who depend on the sale of tobacco products. Menthol cigarettes make up some 35 percent of overall cigarette sales, and in some regions or parts of communities, much more. Cigarette customers often end up purchasing other products which spurs economic activity, provides much-needed jobs, and supports local communities. 

Further compounding this economic challenge is the near certainty that menthol cigarette bans would further the already intense competition small businesses face from the illicit marketing of tobacco products. The National Academies of Science, Engineering and Medicine have estimated that illicit marketing already accounts for up to 1 in 5 cigarettes sold in the United States. Research has also found that a substantial percentage and perhaps the bulk of menthol cigarette sales would simply move to this black market in the event of a ban, further increasing competition with legitimate sources. The bottom line is that small business retail fuel outlets undertake significant efforts to train their employees how to not sell tobacco products to underage youth, efforts that contraband sellers will not make.

The Transportation Department’s National Highway Traffic Safety Administration (NHTSA) announced this week it is withdrawing part of a Trump-era rule that removed California’s waiver under the Clean Air Act to set their own stringent vehicle emission standards. The newly proposed rule change would restore California’s authority to set fuel efficiency and greenhouse gas emission standards for cars and SUVs, and to require automobile manufacturers to sell more electric vehicles. The implications of restoring California’s legal authority to set vehicle emission standards reach well beyond California itself. Thirteen states including New York, Massachusetts, Vermont, Maine, Pennsylvania, Connecticut, Rhode Island, Washington, Oregon, New Jersey, Maryland, Delaware and the District of Columbia adopt California’s low emission vehicle (LEV), zero emission vehicle (ZEV) and vehicle greenhouse gas emission standards. Twenty-two states joined a lawsuit last year to restore California’s air standard setting authority. If adopted, the NHTSA rule would render the lawsuit moot.

Meanwhile, California, New York, Massachusetts, North Carolina, Connecticut, Hawaii, Maine, New Jersey, New Mexico, Oregon, Washington State and Rhode Island Governors wrote to President Biden this week to support stopping sales of new gasoline-powered vehicles by 2035. The Governors want Biden to be more aggressive than he has already called for in his infrastructure package, by setting standards to ensure 100 percent zero-emission sales of medium-duty and heavy-duty vehicles by 2045.

Biden’s proposal would not phase out sales of gasoline-powered vehicles but would incentivize development of electric vehicles (EVs) and charging stations. EVs currently make up just 2 percent of U.S. vehicle sales, and the twelve states want to accelerate a transition to EVs with a phase out of vehicles that run on motor fuels. Click here for the story.

On Wednesday, doubts were raised among environmentalists concerning some of the large U.S. financial institutions commitment to sustainability pledges to achieve net-zero emissions by 2050 or to execute Paris Climate Agreement-aligned targets.

Initial signatories of the Glasgow Financial Alliance for Net Zero, or the Net-Zero Banking Alliance, this week were Morgan Stanley, Bank of America and Citigroup, but the other three of the largest banks, Wells Fargo, JPMorgan Chase and Goldman Sachs did not sign onto the Alliance which agreed on identifying ways to reduce financing for the oil industry and tracking and verifying emissions. To read the entire article, click here.

The Fuels Institute’s Diesel Fuel Quality Council (DFQC) released its first publication earlier this month. The “Diesel Storage Tanks: Industry Practices to Minimize Degradation and Improve Fuel Quality” provides recommended practices for the management of storage tank systems to preserve diesel fuel quality and protect the vehicles using the fuel. The document discusses best practices related to the delivery of diesel fuel, diesel fuel tank and dispenser maintenance, and diesel fuel remediation. 

Information is presented as minimum practices to ensure diesel fuel quality and additional practices for more preventative measures. EMA provided extensive comments on this document during its development. While we have concerns with the distinction between minimum practices and additional practices, the document provides many practices that can be implemented at a dispensing facility to minimize impacts to diesel fuel quality. You can download the document for free from the Fuels Institute website. 

You can take EMA Journal with you wherever you go. Click here to view the Winter 2021 Issue (the latest issue is always online), optimized for any device. Scroll to select the articles that matter to you, then read, learn and share with the icons at the top of your screen. Looking for a past issue? Scroll through past covers on the left side of your browser or use our search feature to find a particular topic. Miss flipping pages? Select "page view" from the menu bar or click the handy magazine icon for a classic page-turner. You can find our Annual Directoryhere which is featured in each Fall Issue.

For information on advertising in this valuable format, please call 844.423.7272 or emailInnovative Publishing. Our Spring Issue has gone to press and will be in your mailboxes in the coming weeks. Our Summer Issue advertising deadline is June 1, 2021. 

Everyone has a vehicle maintenance plan, whether they are the one who performs the maintenance or not. Oil changes, tire rotations, and general tune-ups are a part of life, no matter how busy we are. Without a routine maintenance plan in place, your vehicle will not operate at its peak performance. You may not realize it, but your life insurance has a maintenance plan too, and the consequences of ignoring it can be just as costly.

Please click here to learn more about an annual life insurance policy audit. 

Please always feel free to contact your Federated regional representative or EMA’s National Account Executive Jon Medo at 800.533.0472 for any additional information or risk management questions. Federated is an EMA Corporate Platinum Partner.

This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2021 Federated Mutual Insurance Company. 

EMA Masters is proud to present an excellent opportunity for EMA Marketer Members to attend CEO Exchange at the Four Seasons Resort & Club at Las Colinas in Irving, Texas on May 18-19, 2021. Moving past the isolation caused by COVID-19, owners and CEOs are looking for opportunities to get away and connect. CEO Exchange is a wonderful opportunity for business owners and CEOs to connect with other marketers and get strategies to take their business to the next level. You will get a positive return on your time investment!

In addition to great networking and in-depth exchanges with other owners and CEOs, CEO Exchange will feature two great speakers who will help marketers navigate these turbulent times. Please register now for EMA Masters CEO Exchange 2021!

For EMA Masters Membership Information, please visit, email or call 512.994.5905.Meridian Associates is an EMA Corporate Platinum Partner. 

Earlier this month, the IRS issued Notice 2021-25 to implement the provision of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (signed just before the end of the year) which provides for a 100 percent deduction for qualifying business meal expenses incurred between January 1, 2021 and December 31, 2022. 

This move will be beneficial both for the businesses that have these types of expenses and for the restaurants that are hoping to drive increased spending. The Notice outlines the types of expenses that are covered by the provision as well as its parameters and limits. Businesses that have, or expect to have, meal expenses in the next two years should make sure that they are taking maximum advantage of this new provision.

Renewable Energy Group (REG) (NASDAQ: REGI) fleet customers in Iowa, Washington, D.C. and Massachusetts are ramping up the use of B100 (100% biodiesel) in their fleets. Through a partnership with Optimus Technologies, REG is helping fleets achieve their sustainability goals and reach near-zero emissions. 

Biodiesel is a cleaner alternative to petroleum diesel that is readily available today. It is suitable for use in any diesel engine, and works with current infrastructure, often being blended at a level of 20 percent or B20. With Optimus’ new technology, biodiesel is now able to be utilized as B100.

To read the full press release, please click here. For more information regarding this article, contact REG at 844.405.0160 or email.

For additional information about Renewable Energy Group, Inc., please visit or contact Scott Nemec. Renewable Energy Group is a EMA Corporate Platinum Partner.