March 2020

COVID-19 Update

For the time being, we are continuing to alternate through the office Monday-Friday. We plan on continuing this schedule through the end of April. So far, we feel that this schedule is working successfully by allowing us to stay on top of the most important mail, compliance, AR and AP, but also minimizing the risk of exposure.


As I’m sure you have heard already, Congress has passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2.2 trillion economic stimulus bill which includes a number of programs and provisions that will help support wineries as they cope with the current crisis.
Below please find a brief description of the various aspects of CARES that we received from the Wine Institute News Alert on 3/26. We have taken the initiative of familiarizing ourselves with the process of applying for aid. If you plan on applying for aid but have not done so yet and would like help, please let us know:


CARES ACT PROVISIONS FOR WINERIES:

Small Business Paycheck Protection Program

This SBA loan forgiveness program is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from Feb. 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities.

Employee Retention Tax Credit

Employers are eligible for a 50% refundable payroll tax credit on wages paid up to $10,000 per employee during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50% or more when compared to the same quarter last year.

Deferral of Payroll Taxes 

Employer-side Social Security payroll tax payments may be delayed until Jan. 1, 2021, with 50% owed on Dec. 31, 2021 and the other half owed on Dec. 31, 2022.

Expanded Net Operating Loss (NOL) Provisions

Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80% of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses.

Expanded Net Interest Deduction

The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50% of EBITDA for 2019 and 2020.

MI LARA Announcement

Liquor Licensees Not Required to Place License in Escrow During State Of Emergency
March 31, 2020 – Liquor licensees whose businesses are closed for more than 30 days due to Executive Orders related to the Coronavirus COVID-19 state of emergency are not required to place their license in escrow, but must maintain proof of liquor liability insurance.The Michigan Liquor Control Commission today approved Administrative Order 2020-11 to allow for this exception to administrative rule R 436.1047 for the duration of the executive orders and for 30 days after the executive orders expire. Licensees who do not want to maintain liquor liability insurance must place their license in escrow.Due to the ongoing emergency, which has closed places of public accommodation to the public and directed residents to stay home as much as feasible, the MLCC finds that many licensees may not be able to continue active operation of their licensed businesses for extended periods during the state of emergency.Under Michigan Administrative Code R 436.1047, a licensee that ceases active operation for more than 30 days must place its license into escrow with the MLCC. The MLCC determined that “ceases active operation” doesn’t apply to licensees who have closed their businesses due to the current executive orders.For more information on the coronavirus/COVID-19 state of emergency, please visit the State of Michigan’s coronavirus website at www.michigan.gov/coronavirusFor further information, please monitor the MLCC website for updated information at www.michigan.gov/lccIt is the mission of the MLCC to make alcoholic beverages available for consumption while protecting the consumer and the general public through the regulation of those involved in the importation, sale, consumption, distribution, and delivery of these alcohol products.

Update on COVID-19

We just wanted to send an update on our status here in Napa. As many of you know, there are now or will be soon “shelter in place” guidelines for most of our area. For the time being, our office is still open and we are still here to support you, but with a reduced in-office schedule in place for this week and next. (We will reevaluate our schedule for the beginning of April as necessary.)
Chandra will be in the office Monday, Wednesday, and Friday, with Mail pick up and bank deposits also Monday, Wednesday, and Friday. 
Friday we will close at noon.
Katie will be in the office Tuesday and Thursday.
Sean will be in the office routinely throughout the week.
We expect most tax and compliance deadlines to be extended for this month and next, but for the time being, we are operating on the typical reporting cycle.
If you have questions, or need additional or specific help, please let us know.
We wish you all the best.