CAPITOL UPDATE 3/19/2020
Week in Review
On Monday, we called for swift action by the State to help our industry:
  • accelerate unemployment benefits
  • delay scheduled tax payments (including sales tax remittance) 
  • a state economic relief fund to provide no interest loans
VIDEO: Gov. Walz announces closure of bars, restaurants to dine-in customers
Earlier Monday, Hospitality Minnesota also requested that the Governor submit a formal request to the federal SBA for Economic Injury Disaster Loan Assistance. Working with DEED, we asked our members to communicate their economic injuries to the State. The State passed the eligibility requirements Wednesday and the Governor has formally requested help from U.S. SBA. Current funding for the national program is $1 billion. Additional federal relief is being sought.  
On Monday evening, the Governor ordered the closure of restaurants, bars and other businesses, noting that “these industries are going to need to be protected.” As requested, the State will accelerate unemployment benefits to workers and will hold employers harmless on the surcharge for increased volume of UI applicants.
This week, Hospitality Minnesota and our members have also been promoting economic relief publicly by giving television, radio and print interviews, and submitting an op-ed editorial.
On Wednesday, the Department of Revenue announced a temporary freeze on sales tax remittance payments, as we requested. Business must still file by March 20, but do not need to make payments until April 20. Revenue also indicated that after April 20, business may be able to seek additional relief for reasonable cause. This is a critical development and will hopefully mitigate some short-term cashflow challenges. 
On Thursday, we asked Minnesota’s federal delegation to pass additional relief for hospitality businesses and workers. We’re working with our national partners, including the American Hotel and Lodging Association, the National Restaurant Association and others. Having passed two phases of relief, the federal government is now expected to turn to Phase III of its response, focusing on business relief and other support. Today’s letter highlights potential problems within the Families First Coronavirus Response Act passed by the Senate last evening.  The federal government needs to address the expectation that businesses front the money for worker benefits (then recoup the funds through tax credits) exacerbating existing cashflow challenges for many businesses (if they are able to pay for them at all).
TAKE ACTION ON RELIEF EFFORTS
Contact your state legislators and the Governor and tell them we need urgent action on economic relief in Minnesota including:
  • A state economic relief fund to support no-interest loans for hospitality businesses;
  • An extension of the current sales tax payment “holiday” through July 2020.
  • A freeze and deferment of any and all other tax payments such as income tax, property tax, withholdings, etc. to help with short-term cashflow challenges;
  • A suspension of the accelerated June sales tax payment for 2020;
  • An extension of the time period businesses have to pay liquor vendors without being “posted” and thus not able to make additional purchases. Once allowed to re-open, this will also aid short-term cashflow flexibility.
 
Tell your elected officials that this industry supports 300,000 jobs in Minnesota and we need this help to survive and ensure that we can continue to support these jobs.
 
You can also contact your federal legislators and echo the requests in our federal letter, which include:
  • Temporarily freeze, defer or reduce any and all tax obligations by hospitality businesses, including payroll taxes, quarterly tax payments and filings, etc.
  • Provide assistance in allowing hospitality businesses/workers to defer mortgage, lease/rent and other loan obligations;
  • Issue direct financial assistance to workers impacted by layoffs or reduced hours.
  • Create a federal loan program that allows hospitality businesses to obtain no-interest loans equal to the amount of revenue lost in the next 90 days (and perhaps longer), and/or develop other programs to help provide businesses swift access to capital to deal with liquidity;
  • Expand federal SBA-backed loans for “adversely affected” businesses;
  • Fix the Qualified Improvement Property (“QIP”) technical correction and allow qualifying businesses to amend their returns accordingly;
  • Direct the U.S. Department of Treasury to create a hospitality industry recovery fund, including grants to assist in providing liquidity to businesses, as well as to retain and rehire employees;
  • Provide tax credits for businesses that retain/quickly rehire employees in the face of government-ordered closures;
  • Allow individuals to temporarily access funds from 401(k)s or other tax-sheltered accounts without penalty; and
  • Appropriate funds for Community Development Block Grants for Disaster Relief assistance to help hospitality businesses (which are instrumental to their communities in so many ways) remain viable

You can also participate in the National Restaurant Association’s Action Alert today by clicking here and the American Hotel and Lodging Association’s Action Alert by clicking here.
Economic Impact Survey
Thank you for the responses to the economic impact survey we fielded earlier this week. We shared the data with our partners at the Minneapolis Federal Reserve Bank and are hopeful this information will inform other forms of federal banking policy helpful to our industry.
Requested Extension
We have also requested the Minnesota Department of Health grant extensions for ServSafe Food handling re-certification since no one is able to be tested at this time. Initial indications are that MDH will provide leniency for individuals scheduled for recertification through at least April.
In this challenging time, we are updating our website and member communications daily with real-time intelligence on government programs and compliance that you need. Make sure to bookmark our website: hospitalityminnesota.com and check in frequently.
 
We are fielding many inquiries from hospitality businesses and are adding information on frequently asked questions to our online resources and member communications, as well. If you have a question, please contact info@hospitalitymn.com