Money Management

Virginia Business Community Praises COVID-19 Revival, But Calls for State Action to Reap Full Benefits | State and national

(The Center Square) – Business advocates in Virginia have praised the COVID-19 stimulus package passed by Congress, but said further state action is needed for businesses to fully benefit from the legislation.

The $ 900 billion COVID-19 stimulus provides an estimated $ 325 billion in assistance to small businesses nationwide, including $ 284 billion for paycheck protection program (P3) repayable loans, 20 billion dollars for economic disaster loan grants, $ 15 billion for theaters, independent theaters and cultural institutions and an additional $ 12 billion for businesses in low-income and minority communities.

The congressional bill also addressed some concerns raised by companies regarding the first wave of PPP loans. The bill simplifies forgiveness requests and makes loans tax deductible at the federal level. Deductibility applies to loans that have already been received and to all loans received in Wave 2, which would prevent a disguised business tax increase.

However, Virginia does not automatically conform its tax code to the federal code, which means that state action would be required to ensure that Virginia business owners have the ability to deduct loans from US taxes. State. The state generally conforms the state tax code to the federal tax code when in session. Gov. Ralph Northam’s administration announced plans to do so this year, but made the announcement before Congress included tax deductibility.

“This [bill] would be a huge relief for small business owners in Virginia, ”Nicole Riley, Virginia state director for the National Federation of Independent Businesses, told The Center Square. The NFIB is the largest association of small businesses in the country.

Riley said the NFIB welcomed the second wave of PPP loans at a time when businesses were struggling and unsure whether they would be able to continue to provide services. She said the deductibility provision and the simplification of rebate claims have eliminated some of the challenges businesses would otherwise face.

The NFIB calls on the General Assembly to fully conform its tax code to the federal code so that businesses can fully benefit from deductibility.

Robert Melvin, director of government affairs at the Virginia Restaurant, Lodging & Travel Association, made similar comments. He said federal legislation distinguishes restaurants and hotels by allowing them to claim up to 3.5 times their monthly payroll with P3s loans, which he says will help businesses most affected by COVID restrictions. -19. It also creates a temporary 100% commercial deduction for meals.

“Federal aid has been a real lifeline,” said Melvin.

Melvin said he supports full compliance of his tax code with the federal tax code so that businesses receive full relief.

Riley and Melvin also said the state should avoid additional mandates on companies because they are already struggling to make money. Melvin said much of the spread of COVID-19 has occurred in private places rather than businesses that have followed health and safety guidelines.

Small businesses that have already received PPP loans could apply for additional loans during the second wave if certain conditions are met, such as the business with 300 or fewer employees, a 25% drop in income during a quarter or having used or planning to use the money they received from their previous P3 loan. A business that has not received a PPP loan can apply if it has 500 or fewer employees.