(a) In this section, “qualifying loan or grant proceeds” means the amount of money received by a taxable entity that:
(1) is:
(A) a loan or grant under the Coronavirus Aid, Relief, and Economic Security Act (15 U.S.C. § 9001 et seq.), as amended by the Paycheck Protection Program Flexibility Act of 2020 (Pub. L. No. 116-142), the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260), the American Rescue Plan Act of 2021 (Pub. L. No. 117-2), and the PPP Extension Act of 2021 (Pub. L. No. 117-6);
(B) a shuttered venue operator grant under Section 324 of the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260), as amended by Section 5005 of the American Rescue Plan Act of 2021 (Pub. L. No. 117-2);
(C) microloan program recovery assistance under Section 329 of the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260); or
(D) a grant from the restaurant revitalization fund established under Section 5003 of the American Rescue Plan Act of 2021 (Pub. L. No. 117-2); and
(2) is not included in the taxable entity’s gross income for purposes of federal income taxation under:
(A) Section 276 or 278 of the Consolidated Appropriations Act, 2021 (Pub. L. No. 116-260); or
(B) Section 9672 or 9673 of the American Rescue Plan Act of 2021 (Pub. L. No. 117-2).
(b) Notwithstanding any other law, a taxable entity:
(1) shall exclude from its total revenue, to the extent included under § 171.1011(c)(1)(A), (c)(2)(A), or (c)(3), qualifying loan or grant proceeds;
(2) may include as a cost of goods sold under § 171.1012 any expense paid using qualifying loan or grant proceeds to the extent the expense is otherwise includable as a cost of goods sold under that section; and
(3) may include as compensation under § 171.1013 any expense paid using qualifying loan or grant proceeds to the extent the expense is otherwise includable as compensation under that section.