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khammond on DSKJM1Z7X2PROD with RULES6

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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations
during the first, second, third, or fourth quarter of 2020 that demonstrate at least a 25 percent reduction from the fourth quarter of 2019 for example, an applicant that had gross receipts of $50,000 in the fourth quarter of 2019
and had gross receipts of $30,000 in the fourth quarter of 2020demonstrating a reduction of 40 percent from the applicants gross receipts during the fourth quarter in 2019; or 4 if the applicant was not in business during 2019, but was in operation on February 15, 2020, the applicant had gross receipts during the second, third, or fourth quarter of 2020
that demonstrate at least a 25 percent reduction from the gross receipts of the entity during the first quarter of 2020
for example, an applicant that had gross receipts of $50,000 in the first quarter of 2020 and had gross receipts of $30,000 in the fourth quarter of 2020demonstrating a reduction of 40
percent from the applicants gross receipts during the first quarter in 2020.
B An applicant that was in operation in all four quarters of 2019 is deemed to have experienced the revenue reduction in subsection c1ivA1 if it experienced a reduction in annual receipts of 25 percent or greater in 2020
compared to 2019 and the borrower submits copies of its annual tax forms substantiating the revenue decline.
2i Gross receipts includes all revenue in whatever form received or accrued in accordance with the entitys accounting method from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.
Generally, receipts are considered total income or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. Gross receipts do not include the following: Taxes collected for and remitted to a taxing authority if included in gross or total income such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees; proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customers request, investment income, and employee-based costs such as payroll
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taxes, may not be excluded from gross receipts.
ii Gross receipts of affiliates are calculated as follows:
A Gross receipts of a borrower with affiliates is calculated by adding the gross receipts of the business concern with the gross receipts of each affiliate.
B If a borrower has acquired an affiliate or been acquired as an affiliate during 2020, gross receipts includes the receipts of the acquired or acquiring concern. This aggregation applies for the entire period of measurement, not just the period after the affiliation arose.
However, if a concern acquired a segregable division of another business concern during 2020, gross receipts do not include the receipts of the acquired division prior to the acquisition.
C The gross receipts of a former affiliate are not included. This exclusion of gross receipts of such former affiliate applies during the entire period of measurement, rather than only for the period after which affiliation ceased.
However, if a borrower sold a segregable division during 2020, the gross receipts will continue to include the receipts of the division that was sold.
D All terms in this subsection shall have the meaning attributed to them by the IRS.
iii For an eligible nonprofit organization, a veterans organization, an eligible nonprofit news organization, an eligible 501c6 organization, or eligible destination marketing organization, gross receipts means gross receipts within the meaning of section 6033 of the Internal Revenue Code of 1986.
iv The amount of any forgiven First Draw PPP Loan shall not be included toward any borrowers gross receipts.
3 Any business concern that has more than one physical location and that employs not more than 300
employees per physical location is eligible to receive a Second Draw PPP
Loan if it is assigned a NAICS code beginning with 72 at the time of loan disbursement and otherwise meets the eligibility criteria in subsection c1.
4 Any business concern, or any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 47 U.S.C. 301 et seq., that has more than one physical location and that employs not more than 300
employees per physical location is eligible to receive a Second Draw PPP
Loan if it meets the eligibility criteria in subsection c1 and: 1 Is majority owned or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151 or, with
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respect to a public broadcasting entity as defined in section 39711 of the Communications Act of 1934 47 U.S.C.
39711, has a trade or business that falls under such a code; and 2 makes a good faith certification that proceeds of the loan will be used to support expenses at the component of the organization that produces or distributes locally focused or emergency information.
d How do SBAs affiliation rules affect an applicants eligibility for a Second Draw PPP Loan?
1 Eligibility for Second Draw PPP
Loans is governed by the same affiliations rules and waivers as First Draw PPP Loans, except as described in subsection d2.
2 The affiliation rules under 13 CFR
121.301f are waived with respect to eligibility for a Second Draw PPP Loan for:
i Any business concern with not more than 300 employees that, as of the date on which the covered loan is disbursed, is assigned a NAICS code beginning with 72; and ii A any business concern including any station which broadcasts pursuant to a license granted by the Federal Communications Commission under title III of the Communications Act of 1934 47 U.S.C. 301 et seq.
without regard for whether such a station is a concern as defined in 13
CFR 121.105, or any successor thereto that employs not more than 300
employees, per physical location of such business concern and is majority owned or controlled by a business concern that is assigned a NAICS code beginning with 511110 or 5151; or B any nonprofit organization that is assigned a NAICS code beginning with 5151.
e Who is not eligible for a Second Draw PPP Loan?
An applicant is not eligible for a Second Draw PPP Loan, even if it meets the eligibility requirements of subsection c of this section, if the applicant is:
1 Excluded from eligibility under the Consolidated First Draw PPP IFR; 35
2 a business concern or entity primarily engaged in political activities or lobbying activities, as defined in section 3 of the Lobbying Disclosure Act of 1995 2 U.S.C. 1602, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy or 35 See generally section B2 of the Consolidated First Draw PPP IFR.

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