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COVID-19 Update for July 24: 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, July 24, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

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Insights  <  COVID-19 Update for July 24: 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, July 24, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

National News

Talks on another stimulus package underway

Both the House and Senate resumed talks on a new stimulus package.  While the House continues to support its $3.5 trillion HEROES Act Representatives passed in May, the Senate is planning to introduce its own package this week at a figure closer to $1 trillion.  Already, though, there is some disagreement between the Senate and administration regarding adding $25 billion earmarked to expand testing and contact tracing.  Treasury Secretary Mnuchin, meanwhile, said the focus of the next round of aid will be on getting children back into school, getting workers back into their jobs, and funding further vaccine efforts.  Extending the Paycheck Protection Program – as the Prioritized Paycheck Protection Program (or P4) – will also be under discussion.  Some of the other discussion points to watch for include whether to extend unemployment payments and if so, by how much (the $600 weekly payments are currently set to expire this week), COVID-19 liability, how to help state and local governments, school funding restrictions, and the direction of additional small business aid.  Meanwhile, the EU just announced they have agreed upon their own groundbreaking €750 billion stimulus agreement in recognition of the ongoing crisis.

Paycheck Protection Program forgiveness?

Treasury Secretary Steven Mnuchin last week said he felt all PPP loans under a certain amount could be automatically forgiven, without compliance checks needed.  (For previously mentioned PPP resources, please visit the Available Resources for Massachusetts Businesses section, listed later in this update.)

Main Street Lending Program expands access to more not-for-profits

As of last Friday, the Federal Reserve announced that the Main Street Lending Program has created two new loan options to allow greater access to credit for not-for-profit organizations such as educational institutions, hospitals, and social service organizations.

Business groups look for creation of small business lending facility

Business groups are asking the Federal Reserve and Treasury Department to use some of the leftover $259 billion remaining from the CARES Act to create a small business lending facility that would help solve short-term liquidity issues.

Massachusetts News

Massachusetts records highest unemployment in the country for June

The jobless rate in Massachusetts hit 17.4% for June, higher than the national average by more than 6 percentage points and earning the dubious distinction of being highest in the country.  The combination of the economic shutdown of the state and the commonwealth’s prevalence of businesses in some of the hardest-hit industries – including education, health care, and travel-related businesses – is thought to contribute to the high number.

Governor Baker files $5.5 billion interim budget for August

With still no fiscal 2021 budget proposal, the state is currently operating month-to-month while waiting for additional funding to become clearer.  In light of this, this week Governor Baker filed a $5.5 billion interim budget for the state for the month of August.

Hotlines, websites allow employees to report on unsafe, noncompliant working conditions

Both Governor Baker and Attorney General Healey have set up phone lines and websites for employees to anonymously report on any employers who are not remaining compliant with pandemic-related workplace health and safety protocols.

Governor Baker extends eviction moratorium

With growing momentum in support of extending the eviction moratorium, initially set to expire on August 18, on Tuesday Governor Baker extended the moratorium until October 17, providing some additional time for economic recovery.  Meanwhile, the Boston Housing Authority extended its moratorium on non-essential evictions through the end of the year.

Massachusetts legislature to require face masks, quarantines for out-of-towners in new bill

Last week the Massachusetts legislature introduced a bill that would require visitors from COVID-19 hot spots to wear face masks and quarantine for two weeks, as well as prioritize COVID-19 testing for vulnerable populations and mandate enforcement of workplace safety requirements.

Boston moves into Phase 3 one week after the rest of the state

The city of Boston moved into Phase 3 of its reopening on July 13, a week after the rest of the state.  The city of Somerville, meanwhile, is taking an even more cautious approach, and doesn’t plan to move into Step 1 of Phase 3 until at least August 3.

Venture capital still strong in Massachusetts

Despite the pandemic and economic conditions, venture capital funding continued to be strong in the second quarter of 2020, with more than $4.2 billion invested in 176 deals from April through June.

Industry News

Education

As colleges and universities face budget cuts and layoffs, it is expected that the financial repercussions of the ongoing pandemic will be felt in higher education for years to come.

Meanwhile, earlier this week the University of Massachusetts announced it would freeze its tuition for in-state undergraduate and graduate students, stating “it’s the right thing to do.”

And in elementary and secondary education, Boston, and many other towns and school districts, are still working on plans for the fall, with many options being discussed and more clarity expected by the end of the month.

Health Care

Despite receiving approximately $175 billion in relief funds, hospitals and medical practices are still reeling as they’ve shifted their focus toward providing COVID-19 care and away from more lucrative elective procedures.  The health industry overall has cut millions of jobs.

The pandemic has helped support the telehealth industry, and many are wondering if this shift in how care is delivered will be permanent, or remain temporary.

Also, a study showed that approximately 5.4 million Americans have lost health insurance coverage between February and May.  More adults lost coverage during this time due to job loss than have ever lost coverage in a single year.

Manufacturing

As Congress considers another relief bill, manufacturers are encouraging lawmakers to reverse a change in the 2017 tax law that, as of 2022, will force companies to write down research and development expenditures.  Manufacturers argue if the change stands, U.S. manufacturing competitiveness will be further diminished.

Municipalities

State and local officials are asking the Federal Reserve to amend its rules on its $500 billion municipal lending facility.  Currently, the program is set up to charge penalties so severe that many state and local governments are unwilling to borrow from it.  Other requests include lower interest rates, longer terms, and an expansion in the number of governments eligible.

Restaurants and Hospitality

As of Monday, restaurants can now sell their cocktails to go, thanks to legislation signed by Governor Baker.  Drinks can be as large as 64 ounces, but must be in a closed container and placed in the trunk.  Cocktails will be available to go with food orders through February 2021, or the end of the emergency order.

Additionally, with limited seating capacity and higher expenses needed for cleaning and PPE, restaurants are looking at a new math to try and survive.

Meanwhile, the hotel industry is ramping up its advocacy to ensure additional aid in the next relief package. The requests include creating a specialized loan assistance fund at the Federal Reserve, easing access for hotels to a small business loan program, and putting in place liability protections for businesses.

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:

The Cambridge biotech Moderna announced last week that the early-stage trial of its COVID-19 vaccine created an immune response in all 45 trial subjects.  Although there is still much more work to be done, including expanded testing on 30,000 trial subjects later this month, in the words of Dr. Anthony Fauci, “No matter how you slice it, this is good news.”  And adding to that good news, a coronavirus vaccine being developed by the University of Oxford in conjunction with AstraZeneca also showed promising results after early human trials, and is now set to move into larger trials.

 

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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