Tax

The COVID-19 pandemic caught many businesses by complete surprise when stay at home orders and forced business closures were announced.  Main street businesses and larger companies were required to reduce operations, modify service offerings, or completely close. The aftershock of these changes resulted in some organizations going out of business while others had to drastically cut expenses, including employees, to maintain financial solvency. Six months later it appears the situation is turning around. In fact, it was recently announced that in August there were $642M in new investments across the state including the creation of 4,036 new jobs. As the shift to recovery continues, many Atlanta businesses are looking for ways to bolster working capital to meet expenses and make new strategic investments.

The COVID-19 pandemic has had a significant impact on businesses in Atlanta and across Georgia. From the initial forced business closures to new operating guidelines many have had to be flexible and creative to maintain profitability. These rules have not only impacted how businesses serve customers, but also how a safe workplace is developed and maintained. A central theme that is woven into the regulations is a concern for the health and safety of all those involved. To facilitate this personal protective equipment (PPE) which includes facemasks, face shields, eye protection, and gloves have used. As demand for these items has sharply increased, more businesses are shifting operations to focus on the production of PPE. The good news for companies that have made the transition is that Georgia now offers a PPE Manufacturing Tax Credit.

Many are unaware of this, but Georgia is known as the Hollywood of the South because of all the film productions which choose the state as the location of choice. In fact, according to the Georgia Department of Economic Development, there was a new record set last year with 399 productions filmed representing a $2.9B infusion to the state economy.

The attempts by Congress to negotiate another round of Coronavirus relief for individuals, businesses, and local government agencies have failed to move forward. The inability to come to agreement left many relying on expected relief frustrated and concerned about the future.

The impact of the COVID-19 pandemic has resulted in many changes for Atlanta area businesses. It started with the abrupt government orders around business closures and stay at home orders and transitioned to re-opening guidelines that mandate both employee and customer safeguards (facemasks, social distancing, and sanitizers). There are several well-documented loan programs such as the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) designed to help businesses financially thrive.

As state-mandated rolling shutdowns and business interruptions continue in the COVID-19 pandemic, there is still uncertainty approaching the months ahead. Even organizations that are still using the Paycheck Protection Program (PPP) funds are faced with cash flow planning concerns. By now, many Atlanta business owners are aware of the tax opportunities contained in the CARES Act.

As reported cases of COVID-19 continue to reach new highs in Georgia, with an average of 3,394 per day, there is an increasing concern in the business community that restrictions and forced closures will again be implemented.

For businesses not directly impacted by the COVID-19 forced business closures, there have been a number of necessary changes to maintain operations. Restaurants have had to shift from a dine-in experience to delivery or curbside pickup model, manufacturing companies have adjusted supply chains while others have transitioned to a remote workforce environment. Virtually overnight some employees were terminated, some forced to accepted significantly fewer hours and others faced the new challenge of working from home.

The COVID-19 emergency has forced both businesses and individuals to make difficult decisions. For businesses, it is all about maintaining positive cash flow and reducing expenses until market conditions return to “normal”.

On April 9, 2020, the IRS issued Notice 2020-18 which provides broad extensions for filing and payment deadlines falling on or after April 1, 2020, and before July 15, 2020. The good news is this change applies to many nonprofits offering important relief.