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COVID-19 Update for August 7: 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 7, 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 7: 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 7, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

National News

Talks on another stimulus package:  “still have a long way to go”

Although both the House and Senate continue talks on a new stimulus package, they “still have a long way to go” to get to an agreed upon deal, according to White House Chief of Staff Mark Meadows, one of the negotiators, despite the fact that the $600 supplementary unemployment payments expired two weeks ago.  (Senate Republicans disagree over whether to replace the benefits or drop them.)  An agreement is not expected until next week at the earliest.

Meanwhile, the nation’s childcare providers would receive $60 billion in emergency funding and an additional $50 billion over five years in aid under two bills passed by the House in late July.  Democrats are hoping to include these bills in the future virus stimulus package.

Paycheck Protection Program had impact

While still waiting on guidance regarding PPP forgiveness, a new study shows that small businesses that took advantage of the program increased their survivability odds by 14% to 30%, according to the National Bureau of Economic Research.  (For previously mentioned PPP resources, please visit the Available Resources for Massachusetts Businesses section, listed later in this update.)

PPP loan forgiveness updates

Although additional guidance regarding what loans will be forgiven is still forthcoming, the SBA announced that the portal for PPP loan forgiveness applications will open on August 10.

In their version of the next stimulus package, Republicans are pushing for automatic loan forgiveness of loans under $150,000, with a middle tier of forgiveness requirements for loans between $150,000 and $2 million.

PPP for companies in bankruptcy?

Previously, businesses in bankruptcy were ineligible for Paycheck Protection Program loans, which was determined following normal SBA lending guidelines.  However, a proposal has been floated as part of the bigger stimulus package discussions that would allow those businesses that have filed for bankruptcy or are nearing that step eligibility for PPP loans, potentially opening up the program to thousands (or more) of companies that previously would not have applied.

Second quarter shows U.S. economy shrinks by 33%

As the numbers came in for the second quarter, the Commerce Department reported that the U.S. economy shrank at an annual rate of 33% during this time period.  Meanwhile, 1.4 million people filed new unemployment claims, pushing the unemployment rate to 14.7%.

Massachusetts News

New travel restrictions in effect as of August 1

As of August 1, Governor Baker instituted restrictions for those traveling to Massachusetts (including residents) from other states deemed at-risk.  Anyone traveling from a state other than New York, New Jersey, Hawaii, or any of the New England states must quarantine for 14 days or produce a negative COVID test, or be subject to $500/day fines.  Just this week, Rhode Island was taken off the lower-risk state list.

Current Massachusetts conditions could lead to stalled reopening, rollback

Due to the uptick in number of cases and percent positive test results, some medical professionals are encouraging the governor to halt any further reopening, and even roll back to Phase 2.  There are no specific conditions outlined which would trigger such an action; the decision is basically up to the governor.

Mass. economy shrinks by 44% in second quarter

Making the national numbers for the second quarter looking not that bad, the economy for the state of Massachusetts shrank by 44% in the second quarter.  The timing of the surge combined with a prevalence of businesses in harder-hit industries contributed to the numbers.

Massachusetts tax revenue $3 billion short

Due to the extended tax deadline (July 15), the tax revenue brought in to end fiscal year 2020 was $27.3 billion, short of the anticipated goal by $3 billion.  The Department of Revenue plans to issue updated collection figures in September.

Courts looking at how to restart jury trials

A committee of Massachusetts judges have released a set of recommendations regarding how to re-start jury trials throughout the state, balancing the right to public trial while reducing risk to those in the courthouse.

Governor Baker signs interim budget

On Tuesday, Governor Baker signed an interim $16.5 billion budget that will keep state government running through October, while rejecting the deadline of October 31 for the funding to expire.

Massachusetts joins efforts to expand rapid testing

Massachusetts is one of seven states that have banded together to negotiate with manufacturers in acquiring rapid point-of-care antigen tests, allowing for outbreaks to be more quickly detected.

Stop the Spread initiative expanded

As part of the state’s Stop the Spread initiative, which initially offered free COVID-19 testing throughout eight communities before adding an additional eight last week, announced this week that Framingham will be the 17th location for free testing.  Other cities and towns with free testing available include Agawam, Brockton, Chelsea, Everett, Fall River, Lawrence, Lowell, Lynn, Marlborough, Methuen, New Bedford, Randolph, Revere, Springfield, Taunton, and Worcester.  People do not have to be a resident of one of these towns to get tested.  Additionally, a new pop-up testing site was recently opened in South Boston, which will be offering free walk-up testing through August 15.

Office workers increasingly told to stay home

With the occupancy of office towers in Boston hovering around 5%, more and more businesses are telling their employees to continue working from home, and to plan on doing so, at least until January.

Industry News

Breweries

Somerville’s Slumbrew announced it was closing this week, and Daniel Lanigan, CEO of Lord Hobo Brewery, detailed the myriad of challenges facing brewers amidst the current environment, painting a bleak picture of the industry. Lord Hobo is also ready to open its new Seaport brew pub location and is just waiting for city approval.

Dealerships

Ford announced this week that its current CEO, Jim Hackett, would retire as of October 1, to be replaced by James D. Farley, Jr., currently COO for Ford.  Looking at the first half of the year, with the pandemic impacting car sales, the company lost $876 million.

Meanwhile, GM lost $806 million in the second quarter, but still beat expectations.

Education

Boston City Councilor Kenzie Bok, who represents Fenway and Mission Hill, is asking Boston University and Northeastern University to rethink their decision to bring students to campus.

Meanwhile, New England schools are partnering with the Broad Institute in Cambridge to create campus-wide testing programs that could quickly identify a COVID outbreak within a college community.

The largest and second largest teachers’ unions in the state is encouraging its districts to start the fall as remote-only.

Somerville became one of the first school districts in the state to announce remote-only learning for the fall.

And no matter how they go back, most students won’t be starting school until two weeks later than usual, to give districts more time to get ready.

Health Care

Moderna, which launched the first large-scale vaccine trial, announced this week that its potential vaccine could be the most expensive of all the options currently in development.

Meanwhile, the National Academy of Medicine expects to release its initial recommendations for the vaccine rollout by late August or early September.

And Johnson & Johnson and researchers at Beth Israel Deaconess Medical Center are also working on a COVID-19 vaccine, which just recently entered early-stage trials.

Along with Moderna, Pfizer has begun a late-stage study of the coronavirus vaccine they are developing in conjunction with the German company BioNTech.

Nonprofit Organizations

Many cultural organizations throughout the state, only recently able to reopen, are struggling to raise the funds they need to survive, with many fundraisers cancelled or shifted to virtual events.

Restaurants and Hospitality

Hotels throughout the state continue to grapple with very low occupancy rates, and with its slower reopening, Massachusetts has one of the lowest occupancy rates in the country.  However, some local universities are looking to use Boston hotels to alleviate student housing density issues.

In the American Business Journal’s “New Math” feature, it’s anticipated that it will take two to five years for the hotel industry to rebound.

Retail

A recent survey shows that sales still remain down 50% or more at Massachusetts retailers, despite the fact that stores are now open.

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:

Want to feel happier?  WBUR’s “Kind World” archive has one answer to this question, and several other uplifting stories.  Be sure to check it out!

The Resiliency Fund, set up by Boston City Hall to help those most affected by the pandemic, has raised more than $33 million, distributing much of that money to a range of organizations that help the poor, the hungry, and students.

 

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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