Arts Advocacy Updates
U.S. Small Business Administration Issues Updated Guidance Concerning Shuttered Venue Operators Grant Program; No Set Timeline for Program Start
The U.S. Small Business Administration (SBA) has updated its FAQ document (effective February 12, 2021) to provide more clarity on various issues concerning the $15 billion Shuttered Venue Operators Grant (SVOG) Program, commonly known as Save Our Stages. The SBA has yet to define a timeline for the start of the program as noted in the updated FAQ document. The SBA, along with its regional and district offices across the country, intends to host a number of informational sessions before the start of the program. Sessions will be held for each type of eligible entity and will cover eligibility requirements, revenue requirements, and the direct application process with the federal agency. The SBA has publicly indicated that it will provide advance notice before starting the grant program.
The SBA has confirmed in its updated guidance the interplay between SVOG and the Employee Retention Tax Credit (ERTC) program, which was extended and expanded under the $2.3 trillion FY2021 omnibus appropriations/pandemic relief package passed in December — the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) (P.L. 116-260). In the FAQ document's Use of Funds section, under question 8 (page 10), it states that SVOG grantees can utilize their grant funding for any portion of their employee salaries not covered by the ERTC. The Internal Revenue Services issued recent guidance concerning the extension and expansion of the ERTC as covered by the Economic Aid Act. The SBA also provided further clarifications under the Subsidiaries & Affiliates section (starting on page 12). Eligible subsidiaries and affiliates can still apply for SVOG funds even if their parent companies are not eligible. Furthermore, eligible subsidiary/affiliated companies that have separate legal existences (EIN numbers) can either apply for the SVOG program or the Paycheck Protection Program (PPP). The SBA limits the number of subsidiaries/affiliates to five entities total. All eligible subsidiaries/affiliated companies do not have to make the same choice concerning which program to choose to secure pandemic relief. There are a number of outstanding clarifications that have yet to be made by the SBA, including the following:
- Confirming the term “revenue decline” for the two priority periods; and
- Allowing eligible entities to apply and receive grants/loans from both the SVOG program and the Paycheck Protection Program (PPP).
OPERA America signed on to letters recently sent to the SBA and Capitol Hill to urge immediate clarifications on several issues and to support additional funding for the SVOG program, respectfully. The Biden-Harris administration’s $1.9 trillion pandemic relief proposal — American Rescue Plan — is currently being considered in the U.S. House and provides an additional $1.25 billion for the SVOG program as well as an additional $7.25 billion for PPP.
U.S. Internal Revenue Service Releases New Guidance Concerning Employee Retention Tax Credit
The U.S. Internal Revenue Service issued new guidance concerning the extension, expansion, and retroactive nature of the Employee Retention Tax Credit (ERTC) as passed by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act – P.L.116-260) in December. The law and, according to the guidance, the ERTC have been extended through June 30, 2021, and expanded from 50 percent to 70 percent of qualified wages through June 30, 2021, limited to $10,000 per employee per calendar quarter. The maximum ERTC that eligible entities can claim through the extension and expansion is $7,000 per employee per calendar quarter, totaling $14,000 in 2021. Entities are eligible if they were in operation during January 1, 2021, through June 30, 2021, and experienced either a full or partial suspension of their operation to comply with government health and safety orders due to the current pandemic or at least a 20% decline in gross receipts from a calendar quarter in 2020 compared to the same calendar quarter in 2019. The law passed in December also allows eligible entities who received or will receive a PPP loan to claim the ERTC for qualified wages that are not treated as payroll costs in obtaining PPP loan forgiveness.
OPERA America Joins Arts Sector to Urge More Support for the Creative Economy and Its Workers
OPERA America signed onto a signatory letter developed by businesses and nonprofit organizations across the arts sector to urge the U.S. Congress to provide more support for the creative economy and its workers during and beyond the current pandemic. OPERA America is working aggressively to help creative workers get back to work safely. Interested stakeholders from across the arts and culture sector are welcome to become signatories, as well. The list of signatories will continue to be updated and provided to Congress. The $1.9 trillion American Rescue Plan — the Biden-Harris Administration’s pandemic relief proposal — is on a fast track to being passed by Congress through its budget reconciliation process, which will allow passage by a simple majority in the U.S. Senate. Various U.S. House congressional committees of jurisdiction are considering specific parts of the relief proposal, and it is anticipated that the entire proposal will be on the full House floor for consideration sometime toward the end of February. If passed by the U.S. House, it will be sent to the U.S. Senate for consideration and passage. The proposal provides relief for businesses, nonprofit organizations, states, local governments, schools, families, and individuals and extends important relief programs to later in 2021, including billions in additional pandemic relief for small businesses and nonprofit organizations separate from the PPP and SVOG programs.