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COVID-19 Update for August 21: Here’s What Massachusetts Businesses Need to Know

As the news surrounding the global COVID-19 pandemic continues to evolve, our team at blumshapiro is staying focused on answering the local business community’s most pressing questions. As of Friday, August 21, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

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Insights  <  COVID-19 Update for August 21: Here’s What Massachusetts Businesses Need to Know

As the news surrounding the global COVID-19 pandemic continues to evolve, our team at blumshapiro is staying focused on answering the local business community’s most pressing questions. As of Friday, August 21, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

National News

Some hope on the horizon for new stimulus package

Although far from a deal, both Democrat and Republican leaders have hinted at growing interest to negotiate to get a deal done on a new stimulus package.  Even still, although the House is set to reconvene on Saturday to vote on a post office bill to prevent cutbacks and provide extra money, there is no indication the Senate is planning to reconvene, which means it’s still likely to be September before any new deal is agreed upon.  In the meantime, President Trump’s executive order of August 8 – which provides an additional $300-$400 a week in unemployment benefits to individuals plus defers payroll taxes – may help refocus lawmakers’ negotiations.

The latest Paycheck Protection Program news

Although the SBA opened its loan forgiveness portal on August 10, many lenders are waiting for clarified guidance and new legislation, as well as taking time to ensure they’re ready for the deluge of applications they’re bound to receive.  Also, more small businesses are realizing they may be in position to receive big tax hits on the PPP loans they received, based on owing taxes on payroll expenses that normally could be deducted.  (For previously mentioned PPP resources, please visit the Available Resources for Massachusetts Businesses section, listed later in this update.)

Main Street Lending Program struggling to fill PPP gap

As the Paycheck Protection Program has come to an end, the Main Street Lending Program has yet to see much traction as an alternative funding source to take the PPP’s place.  As of August 12, only $250 million in loans had been committed and another $856 million in the pipeline for a program with capability of lending as much as $600 billion.

Unemployment applications fall below 1 million for first time since pandemic hit

Last week’s numbers showed unemployment claims fell below 1 million for the first time in five months, although still remain at the relatively high level of 963,000 applications for the week.

Massachusetts News

Governor postpones Phase Three, Step Two, and rolls back some standards

In response to less positive metrics results in the coronavirus fight, the state instituted new protocols as of August 11, which included reduced gathering sizes, more stringent face mask protocols, higher scrutiny of restaurant operations, and enforceable fines.

State issues map of communities with highest COVID risks

Earlier this month, the state unveiled a new color-coded map that shows communities’ COVID risk levels, based on colors.  Red signals communities at high risk, yellow coding demonstrates moderate risk, and green communities are at low risk.  Communities in white indicate there have been less than five total cases of COVID-19 reported in the last two weeks.  As of August 8, 10 Massachusetts communities were deemed high risk:  Chelsea, Everett, Granby, Holyoke, Hull, Lawrence, Lynn, Revere, Saugus, and Salem.

Governor Baker signals acceptance of executive order

With no agreement in sight from Congress, Governor Baker this week said that, if no other option is available, he will accept President Trump’s executive order that provides additional unemployment support of either $300 or $400 weekly.

70% of Massachusetts schools plan to go back in-person in some capacity

As of mid-August, approximately 70% of the state’s school districts have plans to bring students into the classrooms at least part-time this fall.  About 30% of school districts are planning for a totally remote teaching experience as classes start this school year.

Childcare shortage looms

Due in part to a combination of childcare centers that have closed and others that have greatly reduced capacity, only 72% of childcare openings that existed in Massachusetts before the pandemic hit are expected to be available come September.

July state tax revenues increase

Offering some surprisingly good news, the July state tax revenues increased by $88 million over the same period last year.  The Baker administration declined to comment, but others cautioned not to get too excited until this figure can be compared with subsequent months’ numbers, to determine whether this is a trend.

State, city shares latest numbers

Governor Baker touted this week that the average number of people being tested daily in the commonwealth is up to around 15,000, well higher than the averages in mid-June (~9,000) and mid-July (~12,000).  On the same day, Mayor Walsh offered the reassuring news that Boston numbers had leveled off after an uptick reported in July, but continued to urge residents to remain vigilant.

MBTA warns of upcoming budget shortfall

With ridership on trains, buses and ferries extremely low this summer, and in combination with already-planned safety upgrades in the works, the MBTA may face a budget shortfall of $400 million by next summer.

Mass. Port Authority announces $300 million shortfall

The Massachusetts Port Authority – which includes Logan International Airport – announced a $300 million shortfall after revenues drastically dropped due to the pandemic.

No sports fans through September

Earlier this week, the Massachusetts Reopening Advisory Board declared that no fans would be allowed in Fenway Park through the remainder of the baseball season, nor would they be welcome in Gillette Stadium (home of the New England Patriots and New England Revolution) at least through September.

Renters in greater Boston may have more negotiating power

Due to the effects of the pandemic on supply and demand for apartments in greater Boston, renters now seem to have more negotiating power when it comes to choosing a place to live, resulting in lower rents and more concessions like pets and lease flexibility.

Stop the Spread initiative expands, continues

The state’s Stop the Spread initiative, which offers free COVID-19 testing, has now been expanded to 20 communities, with free testing available through September 12.  Current communities with free state testing include:  Agawam, Brockton, Chelsea, Everett, Fall River, Holyoke, Lawrence, Lowell, Lynn, Marlborough, Methuen, New Bedford, Randolph, Revere, Salem, Saugus, Springfield, Taunton, and Worcester.  (People do not have to be a resident of one of these towns to get tested.)

Employers have limited time to challenge unemployment charges

Employers should keep an eye out for their July unemployment benefit charge statement and confirm quickly that they appear accurate.  Any protests to the charges must be filed within 30 days.

Industry News

Automotive

A recent report warns that sustaining the remarkable rebound in production may prove incredibly challenging as staffing issues plague the industry.

Breweries

Already challenged by the continued closure of bars throughout the state, local craft beer makers now face the issue of an aluminum can shortage, as more breweries reprioritize from kegs to cans.

Education

Some colleges throughout the region and country are requiring students to sign acknowledgements, waivers, and/or consent agreements regarding the dangers of COVID-19 before being allowed back on campus.

Meanwhile, looking very different from years past, college students are starting to return to greater Boston, in staggered move-in dates and with new policies – like frequent COVID testing – in place.

Still, more and more colleges are reversing their original plans for on-campus student learning, and now moving to all remote education.

Health Care
Cambridge-based Moderna Inc. has struck a deal with the U.S. government to provide as many as 500 million doses of its COVID-19 vaccine to the U.S.  The federal government has already committed to pay Moderna up to $1.525 billion for 100 million doses, with the option to buy an additional 400 million doses.

Hospitals are asking for more funding in any new stimulus package, to keep the industry from laying off more healthcare providers and/or closing hospitals.

Meanwhile, even with the rapid pace at which vaccine development has taken place, it’s unlikely that vaccines will be available to the general public until the spring or summer of 2021.

German biotech company CureVac, with headquarters in Boston and a clinical trial for an experimental COVID-19 vaccine underway, raised $213 million in its initial public offering.

In Massachusetts, healthcare workers are watching the rates of infection carefully to prepare for a second surge, should one develop.

Restaurants and Hospitality
A bipartisan bill that would create a $120 billion fund for restaurants is being backed by Senate Minority Leader Chuck Schumer (D-NY).  His support could help the bill move forward separately from any additional bailout legislation.

A revamped Dine Out Boston is currently underway (August 16-21 and 23-28), featuring many more takeout and delivery options.  The program, which was initially conceived of to help restaurants during typically slow times of year for the industry, has incorporated changes to further help alleviate the effects of the pandemic.

Available Resources for Massachusetts Businesses 

Previously mentioned PPP resources:

Additional and previously mentioned resources:

How You Can Help

The community-minded response of Massachusetts’ business community has been nothing short of extraordinary.  There are plenty of ways to contribute to the statewide effort to navigate this crisis.  Here are few:

Future Updates and Additional Resources

We will be providing regular updates over the next several weeks as new developments are made available.  If you have any questions whatsoever, please do not hesitate to reach out.  We are here to help you with your tax and business advisory needs.

In the meantime, you can refer to the following state agencies and associations for the latest information:

And a Last Good Word…

We all need some good news right now – here’s some from this week:

Looking for a new book for your children or grandchildren?  Proceeds from “The Butterfly Who Flew in the Rain,” which offers a story of hard work and perseverance in the face of adversity, are being directed in part to MassUndocuFund, which provides COVID-19 relief for undocumented people in Massachusetts.  Learn more by reading the recent Boston Globe story:

 

COVID-19 Business Resources

 

Disclaimer:  The contents of this resource are for general informational purposes only. While every effort has been made to ensure its accuracy, the information is provided “as is” and no representations are made that the content is error-free. We have no obligation to update any content, comments or other information for retroactive or prospective interpretations or guidance provided by regulators, financial institutions or others. The information is not intended to constitute legal advice or replace the advice of a qualified professional. There are areas of the CARES Act where additional clarification from the Treasury Department and the SBA is needed. Your judgment and interpretation of the act may be needed. Users should consult with their legal counsel and representatives of the lending institution regarding the proper completion of their application and supporting documentation.

Any written tax content, comments, or advice contained in this article is limited to the matters specifically set forth herein. Such content, comments, or advice may be based on tax statutes, regulations, and administrative and judicial interpretations thereof and we have no obligation to update any content, comments or advice for retroactive or prospective changes to such authorities. This communication is not intended to address the potential application of penalties and interest, for which the taxpayer is responsible, that may be imposed for non-compliance with tax law. 

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