While the federal response to the economic downturn to COVID-19 has been in many ways unprecedented, it only represents one level of assistance for affected businesses. Many states have also responded with assistance programs, filing deadline delays, and other legislative changes related to their existing incentive programs meant to help businesses now.
Seeking out information on state and local COVID-19 responses along with other sources of assistance should be a mandatory part of any business financial plan. We describe these efforts, and much more, in our recent webcast, “Business Retention and Expansion – Resources to move your organization toward resiliency,” which can be accessed here
Many states have looked at ways to amend existing programs to keep companies engaged in the community:
- Oklahoma recently approved legislation to allow companies participating in the Quality Jobs program to receive payments even if payroll requirements are not met for a period of time.
- In April, Nebraska issued guidelines adjusting its Nebraska Advantage Act, where the state can recapture all or some tax incentives if a recipient business doesn’t meet required levels of employment or investment. The guidelines relieve the recapture result if a business can show its failure to meet criteria is directly linked to shutdown related to COVID-19.
- In North Carolina, the state has allowed recipients of its Job Development Investment Grant to carry forward 2020 requirements to a subsequent year to minimize program defaults.
Some states responded by creating new programs to assist businesses, with a focus on small businesses:
- The New York Forward Loan Fund was created for the state’s small businesses, ones with 20 or fewer full-time equivalent employees, as well as nonprofits and small landlords that have seen a loss of rental income. This supports businesses and organizations as they proceed to reopen and assist with the upfront expenses to meet local guidelines.
- The Arkansas Ready for Business Grant provided direct grants to companies for expenses associated with ensuring the health and safety of employees and patrons.
- Wisconsin’s We’re All In Grant Program provides assistance to small businesses impacted by COVID-19. Part of this program provides grants for eligible small businesses that can be used for health and safety improvements, wages and salaries, rent, mortgages and inventory.
Besides administrative programs, state legislatures have used their budget process to continue to offer incentive opportunities:
- New York Gov. Andrew Cuomo signed budget legislation that expanded and extended several state credit and incentive programs, including the Excelsior Jobs Credit Program, the “hire a veteran” credit, the Empire State film production and post-production credit and an industrial and commercial abatement program.
- Virginia passed budget legislation tax laws that included COVID-19 relief provisions, including interest and penalty waivers for delayed tax payments, extended payment deadlines for individual and corporate income taxes, and interest waivers for sales tax payments. Additionally, the state enacted a temporary electronic skill games tax to back a COVID-19 relief fund.
Support is also coming from regional entities such as utility organizations and not-for-profit foundations. Examples in the last few months include the Georgia Power Foundation, the fourth-largest corporate foundation in Georgia, pledging $1 million aimed as assisting efforts for food relief, homeless shelters and displaced workers. Additionally, the Tennessee Valley Authority offered $1 billion of credit support to local power companies by payment deferrals.
The previously referenced examples do not exhaust the list of states and local governmental relief available to companies. Businesses interested in identifying incentives and credits to focus on saving dollars and increasing the rate of return on capital investment projects can benefit from a professional adviser familiar with these opportunities.
Credits & Incentives Services
+1 214 561 2630
Credits & Incentives Services
+1 832 384 7087
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.