Business Update from Senator Jen Kiggans

March 20, 2020

As you all know, COVID-19 has had a major impact on our business communities. If you are a business owner, please know that I am very appreciative of the work you do and your investment in our community. I want to provide you with all the available resources to get us through this difficult time and am attaching below a number of resources from the federal, state, and local level. All this information is meant to be a tool to let you know that there is help out there during this stressful time. We are here for you and are in this together with you. Let us know how we can help.

Taxes:

Updated information from the IRS can be found at: https://www.irs.gov/coronavirus.

Here are a few of the actions currently being taken by the IRS:

Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.

Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. If an individual or business files their tax return or requests an extension of time to file by April 15, 2020, they will automatically avoid interest and penalties on the taxes paid by July 15. The easiest and fastest way to request a filing extension is to electronically file Form 4868 through a tax professional, tax software or using the Free File link on IRS.gov. Businesses must file a Form 7004.

State Business Tax Information:

Businesses impacted by COVID-19 can also request to defer the payment of state sales tax due today, March 20, 2020, for 30 days. When granted, businesses will be able to file no later than April 20, 2020 with a waiver of any penalties.

Attached is the Bulletin from the Department of Taxation: https://www.tax.virginia.gov/laws-rules-decisions/tax-bulletins/20-3

Also, here is the link for dealers to request the extension: https://www.business.tax.virginia.gov/VTOL/tax/Login.xhtml?utm_content=february_2019&utm_medium=email&utm_name=2019_secondq_interestrates&utm_source=govdelivery&utm_term=tax_preparer

The Governor has requested the Department of Taxation to extend the due date of payment of Virginia individual and corporate income taxes. While filing deadlines remain the same, the due date for individual and corporate income tax will now be June 1, 2020. Please note that interest will still accrue, so taxpayers who are able to pay by the original deadlines should do so.

Business Resources:

Following a request submitted by Governor Northam on March 18, the U.S. Small Business Administration (SBA) today approved an Economic Injury Disaster Loan program for Virginia. Small businesses and nonprofit organizations throughout the Commonwealth affected by the COVID-19 public health crisis can now apply for low-interest federal disaster loans of up to $2 million from the SBA to pay fixed debts, payroll, accounts payable, and other expenses. To submit a loan application through the SBA Economic Injury Disaster Loan program, please visit disasterloan.sba.gov/ela/.

Items Required for Applications

1. Loan application (SBA Form 5), completed and signed (this is electronic/online in the portal). To see what the form looks like, an example can be found here.

2. Tax Information Authorization (IRS Form 4506-T), completed and signed by each applicant, each principal owning 20 percent or more of the applicant business, each general partner or managing member; and, for any owner who has more than 50 percent ownership in an affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.

3. Complete copies, including all schedules, of the most recently filed Federal income tax returns for the applicant business; an explanation if not available

4. Personal Financial Statement (SBA Form 413) completed, signed, and dated by the applicant, each principal owning 20 percent or more of the applicant business, and each general partner or managing member

5. Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used)

Statement from the Governor’s Office:

A statewide ban on gatherings of 10 people or more at restaurants, fitness centers, and theaters, as well as a statewide recommendation limiting gatherings of 10 people or more at all other non-essential sites has resulted in many closures, negatively affecting small businesses throughout the Commonwealth. The Virginia Department of Small Business and Supplier Diversity conducted a survey of these affected businesses to determine the economic impact of their losses for the disaster period as compared to the same period in the preceding year. The Department received more than a thousand responses from small businesses throughout all corners of the Commonwealth. Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) assistance to small businesses will lessen the economic burden business-owners face and improve the economic recovery outlook for the Commonwealth.

Hampton Roads Chamber of Commerce:

The Hampton Roads Chamber is a resource for all local businesses. They have created a COVID-19 Business Resource Guide. This includes valuable information to help small and large businesses sustain themselves through this crisis here in Hampton Roads.

If you need assistance with small business matters during this crisis, or have any questions, please contact Jim Carroll at the Hampton Roads Small Business Development Center. Mr. Carroll will be conducting webinar training sessions on the Small Business Disaster Loan program to interested parties next week.

Again, I am very thankful for the valuable work of our local business community. As the situation progresses, I will provide updates via email and/or social media. I have attached a button below to direct you to my Facebook page. If there is anything that my office can do to be of assistance to you in this trying time, please contact us at: district07@senate.virginia.gov or by phone: 757-990-3080 (Virginia Beach office).

Thank you and stay safe,

-Jen