Congress Considering Tax Credit for Cleaning Expenses

The House of Representatives Small Business Committee is considering a bill that would allow a tax credit to businesses and commercial real estate owners or operators for cleaning products and services. If passed, the Bill allows a fifty percent (50%) credit (effectively reducing tax liability by one dollar for every two dollars spent) for qualified cleaning expenses. Qualified cleaning expenses include: (i) cleaning services provided by a trained and certified provider or employee; (ii) certain purchases of cleaning products and equipment; (iii) and obtaining a cleaning certification. In order to qualify, however, the cleaning service provider must be “certified.” For a service provider to be certified they need an industry-recognized certificate in custodial cleaning or cleaning management by a qualified third party. This credit is available for expenses paid between January 1, 2020 through March 31, 2021, and is capped at $25,000 per location and $250,000 in totality per year.

This bill has not yet been signed into law, but business and commercial real estate operators should check now to see whether their cleaning service providers are certified and begin documenting and tracking applicable cleaning expenses. Otherwise, they could miss out on this tax incentive.

We are happy to help with any questions regarding this credit and will continue to track its progress.

Read the full Bill here.

For more information on the Tax Credit Bill, please contact your local Quarles & Brady attorney or:

• Paul J. Valentine: (602) 229-5723 / paul.valentine@quarles.com
• Jared W. Miller: (602) 229-5214 / jared.miller@quarles.com