ABL Dispatch

ABL Dispatch — The Latest Industry News from Washington

BY JOHN BODNOVICH, ABL EXECUTIVE DIRECTOR

COVID-19

American Beverage Licensees (ABL) continues to monitor the rapidly changing situation related to the spread of COVID-19. Concern for the health and safety of our members, and the entire hospitality industry, is paramount, as is the impact on ABL members. The last half-dozen weeks have been very trying for bars, taverns and restaurants thanks to forced closures.

ABL is actively lobbying the federal government for relief for those beverage licensees that have been forced to shut their doors to prevent the spread of the virus. The association is also working with state affiliates like the TLW to make sure that our members are getting the help they need. Please feel free to let us know how we can assist during this challenging time for our industry.

Under normal circumstances, I would devote this column to wishing you a happy Tavern Month in May and share why taverns are such an important part of our communities. And while it’s more important now than ever before to support local taverns and all the people they employ, I recognize that most people are not in the mood to celebrate. Instead, I hope the following COVID-19 updates and information may be helpful to TLW members: • The Coronavirus Aid, Relief and Economic Security (CARES) Act (bit.ly/op-amendment), a $2 trillion disaster relief package intended to offset the economic fallout of the COVID-19 crisis, became law on March 27. • The Small Business Owner’s Guide to the CARES Act (bit.ly/op-cares) from the U.S. Senate Committee on Small

Business and Entrepreneurship outlines key portions of the bill for small businesses. • ABL COVID-19 Resources (ablusa.org/resources/covid19) and The President’s Coronavirus Guidelines for America (bit.ly/op-slow-spread) are resources to follow for an overview of good practices and guidelines. In addition to the Paycheck Protection Program (discussed below), the most important things in the law for beverage licensees to know about are:

• Qualified improvement property. As part of a correction of an error in the Tax Cuts and Jobs Act, businesses are able to immediately write off costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building.

• Payroll tax deferral. Employers can defer payment on their share of Social Security taxes through 2020. Half of the deferred taxes must be paid by Dec. 31, 2021, and the other half by Dec. 31, 2022.

• The employee retention tax credit. Employers are allowed a refundable credit against applicable employment taxes equal to 50 percent of qualifying wages up to $10,000, for a maximum credit of $5,000. Eligible employers include those forced to entirely or partially suspend operations because of COVID-19, or those experiencing a significant decline in gross receipts because of COVID-19.

• Modifications for net operating losses. The provision provides that a loss from 2018, 2019 or 2020 can be carried

back five years. • Additional tax relief. The tax filing deadline is extended from April 15 to July 15.

PAYCHECK PROTECTION PROGRAM

The Paycheck Protection Program (home.treasury.gov/ policy-issues/cares/assistance-for-small-businesses) prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses. The program can be retroactive to Feb. 15, 2020, so employees can return onto payrolls. The loan’s covered period is Feb. 15 to June 30, 2020. In advance of the Paycheck Protection Program process, ABL took several calls from members with questions about the process, and circulated guidance materials from the Small Business Administration (SBA), the Department of the Treasury, other industry groups and business resources.

One thing is clear: The process has not been smooth for many. Frustration with the rollout of the Paycheck Protection Program is bubbling over as small businesses and banks complain that federal government bureaucracy and insufficient funding are complicating things for small businesses trying to stave off layoffs and bankruptcy. Demand is unprecedented for the relief, but questions linger for small businesses concerned with qualifying for loan forgiveness by maintaining payroll, including those bar and tavern owners who have retained only a fraction of their staff because they are only bringing in a fraction of the revenue they once did.

Whether the federal government considers formally converting the loans into grants remains to be seen. While there are reports that the program has run out of funds as of April 15, it is reasonable to expect that Congress will authorize additional funds for the program. Congress is scheduled to resume its session on May 4.

Before filling out an application, tavern owners should gather the following information and documents:

• 2019 Internal Revenue Service (IRS) Quarterly 940, 941 or 944 payroll tax reports.

• Your last 12 months of payroll reports beginning with your last payroll date and going back 12 months (e.g., gross wages for each employee, paid time off for each employee, vacation pay for each employee).

• 2019 1099s for independent contractors that would otherwise be an employee of your business.

• Documentation showing the total of all health insurance premiums paid by the company owner under a group health plan.

• Documentation of the sum of all retirement plan funding that was paid by the company owner. Do not include funding that came from employees out of their paycheck deferrals.

UNPRECEDENTED PUBLIC-PRIVATE MOBILIZATION EFFORT TO DISTRIBUTE FUNDS

The U.S. SBA and Treasury Department initiated a mobilization effort of banks and other lending institutions to provide small businesses with the capital they need. The Paycheck Protection Program is intended to provide much-needed relief to

millions of small businesses so they can sustain their businesses and keep their workers employed. Visit bit.ly/op-sba for more information on the Paycheck Protection Program.

GUIDANCE EXPLAINING PAID SICK LEAVE, AND EXPANDED FAMILY AND MEDICAL LEAVE BENEFITS

The U.S. Department of Labor’s Wage and Hour Division (WHD) published guidance for employees and employers about how each are able to take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA) that went into effect on April 1, 2020.

The guidance includes questions and answers (dol.gov/agencies/whd/pandemic/ffcra-questions) addressing critical issues, such as the definition of a “health care provider,” and the scope of the small business exemption for purposes of exclusion from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, as well as whether public sector employees may take paid family and medical leave.

CORONAVIRUS-RELATED PAID LEAVE FOR WORKERS, AND TAX CREDITS FOR SMALL AND MIDSIZE BUSINESSES

The U.S. Treasury Department, IRS and the U.S. Department of Labor announced that small and midsize employers can take advantage of two new refundable payroll tax credits (bit.ly/op-irs) designed to immediately and fully reimburse them dollar for dollar for the cost of providing coronavirusrelated leave to their employees. This relief to employees, and small and midsize businesses is provided under the FFCRA signed by President Trump on March 18, 2020.

ABL ANNUAL MEETING RESCHEDULED

ABL rescheduled its annual meeting for March 21-22, 2021, at the Hilton New Orleans/St. Charles Avenue in New Orleans, Louisiana. The meeting program will examine the key issues of the day facing independent beverage retailers. ABL postponed the annual meeting, which was set to take place March 29-30, 2020, due to the COVID-19 crisis. TLW

ABL is the voice of America’s beer, wine and spirits retailers in Washington, D.C. The association represents the TLW and its many members, as well as thousands of other on- and off-premise retailers of beverage alcohol across the United States.