A.G. GancarskiSome good news came Monday for Florida businesses looking to get a piece of the $349 billion in federally-backed loans from the CARES Act.
An Executive Order from Gov. Ron DeSantis ensures that whatever money a business secures from the feds, the state government will not take any of it.
Executive Order 20-95, backdated to Apr. 3, directed the Department of Revenue to suspend taxation on those moneys.
The order notes that “many Florida businesses have been negatively impacted by the spread of COVID-19 and the precautionary measures taken by the nation in response to COVID-19,” and goes on to describe the federal “Paycheck Protection Program providing loans to small businesses in furtherance of keeping American workers paid and employed.”
“I find that encouraging small businesses in Florida to apply for these loans is in the best interest of the state and its people,” the order reads, “and requiring payment of documentary stamp taxes on these loans under Florida law will discourage small businesses in Florida from applying for such loans.”
The order stays in place until the end of the coronavirus-driven state of emergency.
The federal Small Business Administration notes that the “Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
“SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities,” the SBA adds.
The program is authorized through Jun. 30.
Sen. Marco Rubio, Chairman of the Senate Committee on Small Business and Entrepreneurship, is one of the principal architects of the program. He has suggested the money currently allocated could run out closer to the beginning of June than the end.
Some banks have balked at the program, which has disbursed over $30 billion in low-interest forgivable loans already.
On Monday, Wells Fargo stopped accepting applications, saying they had reached their cap already.
Many businesses have been scrambling to get a slice of the funds since the loan program was approved.
Slightly more than half of American workers are employed at businesses with 500 or fewer employees. Every lost job means another person will struggle to pay rent or other bills. Unpaid bills, in turn, cut revenue for other businesses.
Layoffs are mounting, and most analysts forecast that the economy will shrink significantly in the April-June quarter, with some estimating a 30% annual plunge for the quarter. That would be deepest economic contraction for any quarter in records dating to World War II. In the week that ended March 21, roughly 3.3 million people applied for unemployment benefits — more than 10 times the number for the previous week and nearly five times the prior record high.
___
The Associated Press contributed to this post. Republished with permission.
