CARES Act Funding for Vermont Businesses
For today's update we thought you would appreciate knowing more about what the Vermont Governor and Legislature are proposing with regard to the use of the COVID 19 funds allocated to the state. This update includes important information about proposals for the use of these funds that are being funneled through the state. The information was drafted by representatives from the law firm of Primmer Piper Eggleston and Cramer and published in the Vermont Society of CPAs' recent legislative update.
Vermont’s Legislative Proposals for Federal COVID Funds
CARES Act Funding – Vermont received $1.25 billion from Washington to assist in COVID-19 response measures. While the Administration has already spent a portion of that, the lion’s share is being discussed by the Governor and the Legislature. The Governor has proposed a $400 million economic package aimed primarily at those businesses mainly impacted by forced closures, as well as significant housing assistance for landlords and tenants. The Governor is also developing a separate $375 million package to stabilize the health care system. A move is currently underfoot in the Legislature to fast-track a $70 million business recovery and approximate $23 million housing bill to the Governor by this Friday using a portion of the $400 million targeted for this purpose. The remaining balance, or some portion thereof, will follow soon thereafter.
Legislative leaders, however, have decided to withhold $400 million from the $1.25 billion total until the August session. The idea is to again have the benefit of time to help make wiser decisions on COVID-19 response measures but also potentially use that money to address State deficits should guidance from Treasury change to allow that. The Speaker sent a letter last week to each House Committee identifying their share of Phase I and II CARES Act funding with the requirement to get their recommendations to the Appropriations Committee by mid this week. This effort is taking virtually all of House Committee time, as well as most in the Senate. A bill(s) will then be developed and acted on separately. The withholding of this portion, however, may create some friction with the Governor and his Administration.
The fast-track economic recovery bill has two elements for businesses. The first is $50,000,000 appropriated to the Department of Taxes to provide grants to eligible businesses as defined in the bill. Eligible businesses may apply for a grant if:
*The business is:
- a vendor registered to collect sales and use tax; or
- an operator registered to collect meals and rooms tax, but this does not include operators who are only operators because they conduct business as a booking agent
*The business files its sales and use or meals and room taxes on a monthly or quarterly basis.
*The business experienced a 75 percent or greater reduction in total sales in any one-month period from March 1, 2020 to September 1, 2020 as compared to the same one month period from March 1, 2019 to September 1, 2019.
The Department of Taxes is directed to establish a formula for determining the amount of grant awards, which shall include a maximum grant amount. The Department is also directed to consider whether and by how much grant awards should be adjusted based on whether an applicant has received financial assistance from other sources.
The second is $20,000,000 appropriated to the Agency of Commerce and Community Development to provide grants to eligible businesses, in coordination with the Department of Taxes. These are businesses that do not pay trust taxes like in the previous element.
- The Agency shall identify local, regional, and State economic development organizations with whom it may partner to most efficiently distribute grants.
- An eligible business may apply for a grant for an eligible use if the business experienced a 75 percent or greater reduction in revenue in any one-month period from March 1, 2020 to September 1, 2020 as compared to the same one month period from March 1, 2019 to September 1, 2019.
The Agency shall establish a formula for determining the amount of grant awards, which shall include a maximum grant amount. The Agency shall consider whether and by how much grant awards should be adjusted based on whether an applicant has received financial assistance from another source.
Source: Vermont Society of CPAs, June 8, 2020