fbpx

Assembly approves tax breaks, $235M in grants for COVID-hit businesses

Daniel J. Munoz//May 21, 2021

Assembly approves tax breaks, $235M in grants for COVID-hit businesses

Daniel J. Munoz//May 21, 2021

The state Assembly approved a $235 million relief package for COVID-hit businesses and a duo of tax breaks, all meant to hold establishments over as the state navigates what could be the tail end of the pandemic.

Under the legislative package first proposed by Gov. Phil Murphy earlier this month, the state would allocate $120 million to microbusinesses; $10 million to child care providers; $20 million to restaurants, bars, and other food and beverage establishments; $50 million to businesses and nonprofits; $25 million for startups, and $10 million for the “Sustain and Serve NJ” program, which effectively pays restaurants to prepare meals for some of the state’s most in-need residents.

All those measures passed the state Assembly on May 20, after passing the Assembly Appropriations Committee just days earlier.

The New Jersey Economic Development Authority, which is overseeing $85 million in relief funds and has awarded $250 million worth of grants, loans and other aid to a combined 55,000 businesses in the past year, would oversee all six grant programs.

Like prior rounds of funding, the new aid would come out of the state’s allotment under the Trump-era Coronavirus Aid, Relief and Economic Security Act.

“Small businesses are the backbone of New Jersey’s economy and assisting them as we reopen our state is paramount. We need to bolster our small business community in every way possible,” reads a joint May 20 statement from 14 Democratic sponsors in the state Assembly. “As New Jersey returns to normalcy, we must ensure that everyone is well-positioned for our inevitable recovery.”

Meanwhile, the proposed Senate Bill 2347 lets businesses delay payments on employment and other business taxes during the duration of the COVID-19 pandemic.

Businesses would have to apply to the NJEDA for this financial relief, which could extend to such taxes as the income, sales and gas tax, and contributions to unemployment, family leave, worker’s compensation, and disability leave.

It was approved by the state Senate in a 38-0 vote on April 13 and the state Assembly in a 76-0 vote on May 20.

Lawmakers introduced the bill over a year ago in April, during the worst of the first wave of COVID-19 and pandemic-related business closures.

“Small businesses and their employees in New Jersey are going to need all the support they can get during the economic downturn caused by the COVID-19 pandemic,” Tom Bracken, who heads the New Jersey Chamber of Commerce, said in a statement that month.

Assembly Bill 5218 meanwhile would allow restaurants, banquet halls, wedding venues and alcoholic beverage manufacturers to deduct on their tax bill up to $150,000 in expenses to adapt to COVID-19 safety measures.

Those can include heating, ventilation and air conditioning, and as well as outdoor dining arrangements. Chain restaurants and those with more than 100 employees are barred from taking advantage of this relief, under the bill.

Amid COVID-19 pandemic business closures and ensuing restrictions, businesses have relied on billions of dollars in state and federal aid, most grants, or forgivable or low-interest loans.

Under the federal Paycheck Protection Program, the U.S. Small Business Administration approved 157,405 forgivable loans totaling $17.3 billion in 2020, and in 2021 approved 134,362 loans totaling roughly $8 billion.

A $28.6 billion pot of money run by the SBA to help pandemic-hit bars and restaurants saw more than 16,000 applicants as of May 11. Meanwhile, a $16 billion grant program meant to help pandemic-hit live venues, performing arts centers, theaters and museums had 11,500 applicants as of May 11.

o