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COVID-19 Update for May 8: 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, May 8, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

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Insights  <  COVID-19 Update for May 8: 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, May 8, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.   

The Latest News

Update on round two of the Paycheck Protection Program

As of Tuesday, the second round of the PPP still had approximately $135 billion of its initial $310 billion left to loan, lasting longer than some had thought.  This is due in part to more smaller businesses getting funded, and a smaller overall average loan amount.  At this rate, funding is expected to last until early next week.  Meanwhile, mid-week saw the Massachusetts Attorney General lead the charge of 24 attorneys general reaching out to federal lawmakers to revamp the PPP process.

SBA issues guidance on eligibility of PPP funding

New guidance released by the SBA is encouraging some businesses to take a second look at the funding they received.  Publicly traded companies with access to capital markets in particular may not be eligible under the new guidelines.  The SBA has also extended its deadline of returning the money with no penalty by one week, until May 14.

Confusion continues with regard to PPP loan forgiveness

Despite new guidance issued by the SBA, confusion still surrounds the loan forgiveness aspect of the PPP.  Specifically, two separate deadlines are in conflict – one that requires all money spent within eight weeks of receiving it, and one saying that the money must be spent by June 30.  Additional guidance is still expected.

Continued discussion on IRS guidance regarding whether PPP costs will be deductible

Last week the IRS released guidance addressing the deductibility of otherwise deductible expenses incurred in a taxpayer’s trade or business when the taxpayer receives a PPP loan, stating that forgiven PPP costs would not be deductible.  Since then, bipartisan support in Congress is building to reverse this guidance, and allow both the loan forgiveness and deductible expenses.  More discussion surrounding this is expected.

Coronavirus Stimulus #4

Lawmakers are beginning to discuss whether the economy needs a long-term federal rebuilding effort that could amount to trillions of dollars; a parallel discussion regarding how long deficit-financed efforts should go on is also being considered.  It’s possible the next relief package could be voted on by the House as early as next week.

Update to Main Street Lending Program

The Federal Reserve Board announced that it was expanding the scope and eligibility of the Main Street Lending Program.  Changes include adding a third loan option, lowering the minimum loan size, and expanding the pool of potential borrowers.  A start date for the program still has not been announced, but is expected soon.

Massachusetts News

Reopening Massachusetts

Promising numbers regarding the COVID-19 outbreak in Massachusetts have been moving in the right direction, although Governor Baker restated that he is looking for at least two weeks of steady progress.  U.S. Representative James McGovern of Worcester additionally shared that a cautious reopening is key for economic growth.

Meanwhile, the Massachusetts High Technology Council released a report examining how to reopen the Massachusetts economy.  They shared their report first with the Reopening Advisory Board formed by Governor Baker, which has been receiving input from more than 20 different industry groups and community coalitions.

And, mid-week Governor Baker announced he has already received an “interim” report from his Reopening Advisory Board, and expects to receive more well before the May 18 deadline.

Cease-and-desist orders sent to more than 60 businesses

Non-essential service businesses that have kept their physical locations open have been sent cease-and-desist orders by the state for allegedly violating restrictions related to COVID-19.

PPP loans in Massachusetts

Smaller businesses seem to be faring much better in the second round of the PPP, as the size of the average loan dropped by almost 60% so far in the second round.  Additionally, more Massachusetts firms already have secured loans than during the entire first round.

Economic fallout

Compared with last April, tax collections for April 2020 were down more than $2.3 billion, although some of the decline may be a result of the pushed-back state tax deadline to July 15.

Massachusetts manufacturers face proposed stormwater rules challenges

The U.S. Environmental Protection Agency is proposing updated stormwater regulations that could have a huge impact on Massachusetts manufacturers already struggling as a result of the COVID-19 pandemic.

Face masks now required

Governor Baker’s executive order, requiring everyone in Massachusetts to wear a face covering in public when unable to socially distance from others, went into effect on Wednesday.  Additionally, a public health advisory requesting everyone in Boston with exception of essential workers to stay home from 9 p.m. to 6 a.m. has been extended until May 18.

Deadline today:  Facebook supports small businesses in greater Boston

Facebook recently announced that it will offer $625,000 in grants to 156 local companies throughout greater Boston that are struggling as a result of the economic fallout.  Each grant will equal about $4,000.  The deadline to apply for a grant is today.

Industry News

Construction

Boston has started discussing plans to allow more construction projects to restart, including outdoor and steel erection work to start as of May 18 and all essential construction projects to resume on May 26.

Dealerships

Governor Baker’s expansion of essential services and relaxation of some guidelines has also allowed car dealerships to resume over the phone or online sales, following remote fulfillment rules.  Test drives are still not permitted, and all documents should be done electronically whenever possible.

Meanwhile, auto parts manufacturers are asking lawmakers to allow them access to federal loans to help them start parts production again.

  • READ: Auto parts makers asking for U.S. loans (Bloomberg)

Education

Colleges and universities continue to discuss how to start the fall semester and what that will look like.  While some colleges have committed to onsite classes for now, others, such as Cape Cod Community College, have already announced online classes will continue throughout the fall semester.

Meanwhile, some students at Boston University have filed a class action lawsuit surrounding reimbursement for room, board, and other fees for the spring semester.

Health Care

Bipartisan House Representatives support exempting critical healthcare funds from the caps set under the Budget Control Act as a result of the recent pandemic, but the Trump administration is opposed to the increased funding.

Additionally, as long-term care providers begin to assess the business-side challenges and issues they have faced over the last few months, there are several considerations to keep in mind.

Also, Medicare providers may need help navigating the requirements contained within the distributions provided earlier through the CARES Act.

Life Sciences

For the first time ever, the FDA is allowing the experimental gene-editing technology CRISPR to be used by the general population, as it recently okayed Cambridge-based Sherlock Biosciences to move forward on a coronavirus test it developed that uses the CRISPR gene-editing technology.

Manufacturing

As a result of the assistance provided to manufacturers from the Baker administration, more than 600 businesses have already applied to make personal protection equipment.

Real Estate

Although most real estate deals are on hold or dead, some have been able to adapt and get their deals through.

Retail

As of Tuesday, non-essential Massachusetts businesses were allowed to bring in employees as long as they follow specific safety and social-distancing requirements.

Available Resources for Massachusetts Businesses 

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:

As Siemens Healthineers AG adapted their production last month, they also made the decision to join in the fight against COVID-19 by producing 25 million antibody tests that could help track the virus and reopen the economy.  About 800 employees at the company’s Walpole facility are currently preparing to make the tests, which they hope to make available to the public later this month.

 

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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