Like a belated, creative Christmas stocking, the $ 900 billion federal aid package adorns North Bay with a bit of everything – from $ 284 billion loans to $ 110 billion tax breaks.
“They call this Christmas tree legislation in Congress,” said David Colgren, spokesman for CalCPA, a 45,000-member 14-chapter accountants association across California.
The long-awaited incentive – signed on Sunday – includes another round of Paycheck Protection Program business credits and extensions to excise tax credits that benefit wine, beer and spirits makers.
It also includes $ 15 billion in art and entertainment funding to help destroyed music venues and cultural institutions. Jeff Nathanson, Executive Director of the Museum of Sonoma County, promised to look into it. The museum has been closed since March.
“Hopefully we will benefit from the new aid package,” he said. “We are thrilled that this type of support has been approved because this cultural sector has been ignored for a long time. I am sure we will qualify for this scholarship. “
The $ 2.3 trillion federal spending package, which also prevents a shutdown and funds the federal government with $ 1.4 trillion, may not be the definitive answer to the suffering of COVID-19, but it is, according to Rep. Mike Thompson good start for the Weinland region, D-St. Helena.
“I see this as a bridge to get where we want to be,” Thompson told the Business Journal. “When you legislate, never let perfect become the enemy of good. We had to act. It’s just sad that it took so long. “
The Fifth District Congressman noted “a great disappointment” that Disaster Relief did not issue this final auxiliary bill, especially since tax breaks for corporate meals known as “three martini lunches” did.
“That was never the answer. These restaurants are closed, ”he said.
Tax money flows in
Thompson urged and advocated an extension of excise tax credits that benefit wineries and breweries. Natalie Cilurzo, president of the Russian river brewery, said she was “very excited”.
The tax break, which was introduced and made permanent three years ago, now provides a tax credit of $ 1 and 90 cents for every gallon manufactured up to 30,000 and 100,000 gallons, respectively. Small brewers can keep the tax rate of $ 3.50 per barrel on their first 60,000 barrels. The previous rate was twice as high, which means a saving of 50% for Cilurzo.
The Russian river brewery produced nearly 40,000 barrels that year, Cilurzo said.
“We’re closed and just roll with the blows. In the city center we only do take away and have 42 people on leave, ”she said.
Nevertheless, this time Cilurzo passed on the PPP funding.
“We got $ 2 million in the first round. I firmly believe that this money needs to be used for small businesses, ”she said, regarding her company as medium-sized. “I hope (others) will take my lead.”
On the other hand, Judd Wallenbrock, CEO of C. Mondavi & Family, who runs the Charles Krug winery in the Napa Valley, plans to apply for another PPP loan.
The wine business received $ 1.9 million in the first round of the $ 660 billion program as one of more than 4,100 federal government-backed soft loans. More than half a year ago, around 1.4 billion US dollars were processed in the counties of Napa, Sonoma, Marin, Mendocino and Solano.
“We will definitely submit it. It was good that we did it on the first lap. We’re not making a profit and it kept people busy, ”said Wallenbrock.
The economic success of C. Mondavi & Family can be twofold due to the pandemic and forest fires.
“We’re pretty unsure of the effects of the fires,” he said.
The whites and lighter reds are okay, but the verdict on the rugged, signature reds from the Napa Valley winery is still pending.
Applying for forgiveness for the first PPP loan is also questionable, Wallenbrock added.
If so, C. Mondavi & Family would not refuse alone. Some companies that received the PPP loans through the US Small Business Administration continued to seek forgiveness. Many said the forms and process were confusing and that the Internal Revenue Service had dampened tax breaks.
Ultimately, the SBA improved the forms to simplify the process.
And the IRS, which warned companies not to ask for forgiveness and double-dipping expenses, has been overridden by the new rules in this relief package. This time, the bill provides a tax deduction for expenses related to PPP loan issued.
Another important milestone in the package: Loan recipients with fewer than 300 employees can apply for PPP financing a second time. However, the company needs to demonstrate that sales have decreased 25% in each quarter of 2020 compared to 2019.