New York’s recently passed budget includes $800 Million in cash assistance for small businesses and for-profit independent arts and cultural organizations who have experienced economic hardship during the COVID-19 pandemic. The program will be administered by the Empire State Development Corporation.
The fiscal year 2022 Budget also includes a new $40 million fund that will provide general operating support to assist nonprofit arts and cultural organizations as they recover from the impact of the COVID-19 pandemic, as well as an additional $20 million for new capital grants to help arts and cultural organizations comply with COVID-19 health regulations (including outdoor performance space projects, flexible seating, HVAC and filtration upgrades).
SHOULD YOU APPLY?
The package prioritizes providing assistance to businesses with 100 or less employees, 10 or less employees, and women and minority owned businesses. These businesses are referred to as micro-businesses or small businesses throughout the budget. The package is to be made available to businesses that do not qualify for business assistance grant programs under the federal American Rescue Plan Act of 2021 or any other available federal COVID-19 economic recovery or business assistance grant programs, including loans forgiven under the federal Paycheck Protection Program, or are unable to obtain sufficient business assistance from such federal programs, with priority given to socially and economically disadvantaged business owners including, but not limited to, minority and women-owned business enterprises, service-disabled veteran-owned businesses, and veteran-owned businesses, or businesses located in communities that were economically distressed prior to March 1, 2020, as determined by the most recent census data.
To qualify you will need to:
- Be incorporated in New York state or licensed or registered to do business in New York state;
- Be a currently viable small business or for-profit independent arts and cultural organization that has been in operation since before March 1, 2019;
- Be able to demonstrate lost revenue or other economic hardship due to the COVID-19 pandemic or compliance with COVID-19 health and safety protocols which resulted in business modifications, interruptions, or closures. To demonstrate lost revenue or other economic hardship, the applicant shall show a loss in year-to-date revenue as of December 31, 2020, compared with the same period in 2019;
- Be in substantial compliance with applicable federal, state and local laws, regulations, codes and requirements; and
- Not owe any federal, state or local taxes prior to July 15, 2020, or have an approved repayment, deferral plan, or agreement with appropriate federal, state and local taxing authorities.
State Budget Director Robert Mujica stated that the program is meant to get people back to work. “It’s to make sure we can get those businesses going so they can re-employ and bring the unemployment rate back down, and deal with missing payments, rent payments they have not been able to make.”
In addition to the $800 million in cash assistance the budget contains another $200 million in total for restaurants and arts organizations. This latter piece includes $25 million in grant funding to support restaurants that provide meals to distressed and under-represented communities, $40 million for arts and cultural nonprofit organizations, $35 million in tax credits for hard-hit restaurants, and up to $100 million in tax credits to jump start tourism activity in New York City.
Please note you cannot use any portion of this grant to re-pay or pay down any portion of a loan obtained through a federal coronavirus relief package for business assistance or any New York state business assistance programs
Under the program eligible costs include:
- payroll costs; costs of rent or mortgage
- costs of repayment of local property or school taxes associated with such small business’s location; insurance costs;
- utility costs; costs of personal protection equipment (PPE) necessary to protect worker and consumer health and safety;
- heating, ventilation, and air conditioning (HVAC) costs, or other machinery or equipment costs, or supplies and materials necessary for compliance with COVID-19 health and safety protocols, and other documented COVID-19 costs as approved by the corporation.
- Mortgage payments or commercial rent shall be considered eligible costs.
- Payment of local property taxes and school taxes shall be considered eligible costs.
If you have any further questions on the application process or the impact that the grant may have on your business from a tax perspective please do not hesitate to reach out to a member of our COVID-19 Task Force at email@example.com.