FROM WASHINGTON

TGA Tells Congress to Make Tax Credits Refundable

On June 25, TGA joined over 100 organizations in urging Congress to temporarily make general business tax credits refundable.

TGA Urges U.S. Government to Create Backstop for Commercial Credit

On June 23, TGA signed on to a letter with more than 20 other associations urging the Trump Administration to create an emergency, temporary federal backstop for commercial credit.

TGA Again Urges Congress to Expand Employee Retention Tax Credit

On June 17, TGA again joined over 100 other organizations in urging Congressional leadership to approve the bipartisan JOBS Credit Act (H.R. 6776). The legislation would expand the employee retention tax credit (ERTC) by expanding the credit percentage from 50% to 80% of qualified wages; increasing the per-employee limitation from $10,000 for all calendar quarters to $15,000 per calendar quarter (and an aggregate of $45,000 for all calendar quarters); and creating a phased-in credit, which will allow employers with more than a 20% decline in gross receipts to be eligible for a portion of the credit.

TGA Urges Congress to Expand Employee Retention Tax Credit

TGA joined over 100 other organizations in urging Congress to approve the bipartisan JOBS Credit Act (H.R. 6776). The legislation would expand the employee retention tax credit (ERTC) by expanding the credit percentage from 50% to 80% of qualified wages; increasing the per-employee limitation from $10,000 for all calendar quarters to $15,000 per calendar quarter (and an aggregate of $45,000 for all calendar quarters); and creating a phased-in credit, which will allow employers with more than a 20% decline in gross receipts to be eligible for a portion of the credit.

Trump Signs Paycheck Protection Program (PPP) Flexibility Act into Law

On June 5, President Trumped signed into law the Paycheck Protection Program (PPP) Flexibility Act. The law will modify the PPP by extending the expense forgiveness period from 8 weeks to 24 weeks; reducing the 75% payroll ratio requirement to 60%; expanding loan repayment restrictions from 2 years to 5 years; and extending the June 30 rehiring deadline to December 31, 2020.

TGA Letter Urging U.S. Government to Establish Uniform Regulations for Protecting American Flying Public During Pandemic

TGA has drafted a letter urging the Trump administration to immediately implement uniform safety regulations to protect the flying public as our country emerges from this pandemic. Without uniform regulations, Americans will face a myriad of conflicting regulations that differ by airport and differ by airline, creating confusion, and instilling fear that America’s skies are not safe to fly just as we enter the critical summer travel season. Please let TGA’s Nate Herman know by this Friday, June 12 whether TGA should send the draft letter and, if so, what other organizations could/should join TGA on the letter (like NLDA).

Should TGA Support Fixing the Employee Retention Tax Credit?

TGA would like to sign a letter endorsing the bipartisan JOBS Credit Act (H.R. 6776), legislation that would fix the employee retention tax credit (ERTC) by expanding the credit percentage from 50% to 80% of qualified wages; increasing the per-employee limitation from $10,000 for all calendar quarters to $15,000 per calendar quarter (and an aggregate of $45,000 for all calendar quarters); and creating a phased-in credit, which will allow employers with more than a 20% decline in gross receipts to be eligible for a portion of the credit. Please let TGA’s Nate Herman know by this Friday, June 12 whether TGA should sign the letter endorsing the legislation.

TGA Endorses Legislation Adding Pandemics to Business Interruption Insurance

Last week, TGA endorsed H.R. 7011, legislation that would require pandemics to be added to covered issues under business interruption insurance. Many travel goods companies with business interruption insurance received no benefits because pandemics were not covered.

TGA Supported Fixes to Paycheck Protection Program (PPP) Passes House

On May 28, the House approved by a vote of 417-1 the TGA-supported Paycheck Protection Program Flexibility Act, which would make much-needed fixes to the Paycheck Protection Program (PPP), including: extending the expense forgiveness period from eight weeks to twenty-four weeks; reducing the 75% payroll ratio requirement; eliminating 2-year loan repayment restrictions for future borrowers; allowing payroll tax deferment for PPP recipients; and extending the June 30 rehiring deadline. The Senate is expected to approve the legislation shortly.

More China Tranche 3 Tariff Exclusions for Travel Goods

Last week, on May 22, the U.S. government announced that it has granted new exclusions from the punitive China tariffs for three travel goods items (NO luggage) – certain plastic handbags (see description on page 8, #36; see petition), certain plastic coin purses (see description on page 8, #37; see petition), and certain MMF travel bags (see description on page 8, #38; see petition). Anyone importing products matching these descriptions no longer pays the punitive 25% tariff (until Aug. 7, 2020). Previous tariffs paid are eligible for refunds, retroactive to Sept. 24, 2018. The U.S. government also denied thousands of petitions over the last week. In fact, USTR has reviewed all 30,283 Tranche 3 petitions submitted – denying 28,786 petitions to date and only granting 1,497 petitions to date (a 4.9% approval rate). For travel goods, out of 868 petitions filed, USTR has granted only 25 petitions, and rejected 843 of those petitions (a 2.8% approval rate).

TGA Urges Congress to Not Tax PPP Relief

On May 7, TGA joined more than 150 other organizations in urging Congress to ensure that Paycheck Protection Program (PPP) relief is not subject to income tax.

New China Tariff Exclusions Offer Little Relief Increasing Urgency for CEOs to Sign TGA Industry Letter

On April 23, the Office of the U.S. Trade Representative (USTR) announced that it has issued new exclusions under the China 301 tariffs.

Contrary to published reports, the exclusions for travel goods only provide benefits to certain segments of the industry, primarily duffels with or without wheels and certain backpacks and messenger bags. The items, as described in the USTR Federal Register notice, are:

  1. Messenger bags of polyester, each measuring not more than 50 cm by 38 cm by 11 cm, weighing not more than 2.5 kg (described in statistical reporting number 4202.12.8130)
  2. Backpacks with hydration system, each measuring not more than 51 cm by 28 cm by 9 cm, weighing not more than 1 kg (described in statistical reporting number 4202.92.0400)
  3. Backpacks of 66.66 tex polyester, without hydration systems, each measuring not more than 57 cm by 44 cm by 11 cm (described in statistical reporting number 4202.92.3120)
  4. Duffel bags of polyester, each measuring not more than 81 cm by 39 cm by 11 cm, weighing not more than 7 kg (described in statistical reporting number 4202.92.3131)
  5. Duffel bags made predominantly of man-made fibers, each measuring not more than 98 cm by 52 cm by 17 cm, weighing not more than 7 kg, with wheels (described in statistical reporting number 4202.92.3131)
  6. Garment bags of polyester, each measuring not more than 69 cm by 46 cm by 11 cm, weighing not more than 2 kg (described in statistical reporting number 4202.92.3131)
  7. Shaving/toiletry bags of polyester, each measuring not more than 30 cm by 28 cm by 11 cm, weighing not more than 1 kg (described in statistical reporting number 4202.92.3131)

Anyone (not just the petitioner) importing products from China matching these descriptions no longer pays the punitive 25% tariff (until August 7, 2020). Previous tariffs paid are eligible for immediate refunds, retroactive to September 24, 2018.

Of note, all 7 items granted exclusions arise out of petitions from a single company – Advantus Corp. (go to https://comments.ustr.gov/s/docket?docketNumber=USTR-2019-0005 and search “Advantus”).

Meanwhile, on the same day, USTR rejected hundreds more travel goods petitions, including key petitions on luggage. Only 100 more travel goods petitions, most on very specific products, are still to be reviewed.

Sign TGA CEO Letter Today!
This is all the more reason why we need you to sign the revised industry CEO letter to President Trump and Congress urging them to 1) fix the duty deferral so it helps our industry and 2) grant pending tariff exclusion petitions on travel goods under the Tranche 3 China 301 tariffs. The letter focuses on the unique nature of the industry and highlights the devastating impact this crisis has had on a small industry, mostly comprised of small businesses who depend on travel. If CEOs are interested in signing, please send the following information to TGA’s Nate Herman by close of business this coming Monday, April 27, at 12:00 noon EDT.

  • Name
  • Title
  • Company
  • City and State

Please contact Nate Herman, TGA’s Director of Government Relations, at nate@travel-goods.org or (202) 853-9351 with any questions or comments.

Need Feedback – Draft Recommendations for the Next Stimulus Package

Working with the American Apparel and Footwear Association (AAFA), TGA plans to submit recommendations for the next stimulus package. The draft recommendations focus on making improvements to the last stimulus package, duty deferral, and other provisions that would help the industry. We need feedback/suggestions on the recommendations by tomorrow, Friday, April 24. Please send your comments to Nate Herman, TGA’s Director of Government Relations, at nate@travel-goods.org, (202) 853-9351.

We Need You to Sign the Revised Industry CEO Letter to President Trump

We need you to sign the revised industry CEO letter to President Trump and Congress urging them to 1) fix the duty deferral so it helps our industry and 2) grant pending tariff exclusion petitions on travel goods under the Tranche 3 China 301 tariffs. The letter focuses on the unique nature of the industry and highlights the devastating impact this crisis has had on a small industry, mostly comprised of small businesses who depend on travel. If CEOs are interested, please send the following information to TGA’s Nate Herman by this coming Monday, April 27, at 12:00 noon EDT.

  • Name
  • Title
  • Company
  • City and state

Please also share how much you owe in duties between now and the end of April. The data will be kept confidential and aggregated for the purpose of the letter.

Congress Approves Additional Funding for Paycheck Protection Program (PPP)

On April 21, the Senate approved $300 billion in additional funding for the Paycheck Protection Program (PPP), the small business lending program created in the last stimulus law that ran out of money last week. The House is expected to approve the legislation today, which should make the additional funding available to small businesses by early next week.

TGA Victory – Partial Duty Deferral

Last night (April 19), President Trump issued an Executive Order implementing a 90-day duty deferral for March and April 2020 entries. Shortly after that, U.S. Customs and Border Protection (CBP) issued two messages and an interim final rule outlining the details of the deferral.

The 90-day duty deferral does NOT apply to an entry summary that includes merchandise subject to antidumping duties, countervailing duties and/or Section 201, 232 or 301 (China) duties.

Further, the importer must prove that they have a significant financial hardship. A hardship is defined as an importer that is fully or partially suspended during March 2020 or April 2020 due to orders from a competent governmental authority limiting commerce, travel, or group meetings due to COVID-19, AND, as a result of such suspension, the gross receipts of such importer for March 13-31, 2020 or April 2020 are less than 60 percent of the gross receipts for the comparable period in 2019.

The duties on qualifying entries will be deferred 90 days from the date the duties for each entry were due to be paid (or 90 days from the date the periodic monthly payment was due). There will be no interest or any other penalties on the deferred duties.

What Does This Mean?
Based on our understanding, we believe that virtually all travel goods importers will meet the hardship requirement. However, the Executive Order excludes from duty deferral any entry that is subject to the China 301 duties. In essence, that means that all U.S. travel goods imports from China are NOT eligible for duty deferral.

U.S. imports of travel goods from any other country, such as Vietnam, India, etc, that were entered in March or April are eligible for duty deferral.

This is a fast-moving issue. TGA will share more details with members as they come available. Further, TGA will continue to push for duty deferral for ALL U.S. travel goods imports.

More information is available via the following links:
Executive Order
Treasury Department Statement
CSMS #1, CSMS #2
Interim Final Rule

Please contact Nate Herman, TGA’s Director of Government Relations, at nate@travel-goods.org or (202) 853-9351 with any questions.

TGA Membership

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