Updated April 2, 2020, Updated on May 1, 2020
COVID-19 has changed the way Washington companies conduct business, especially after Governor Jay Inslee issued an Executive Order directing all residents to stay home except for certain “Essential Critical Infrastructure Workers,” and ordered all nonessential businesses to close until at least May 31. In realization of the impact of these changes on Washington businesses, both the Washington state and federal governments are implementing programs designed to provide economic relief. Policies and programs are changing rapidly.
Information regarding “Essential Businesses,” as well as options for relief for Washington companies follow.
What are “Essential Businesses?”
A full list of Governor Inslee’s “Essential Businesses” can be found here. Sectors considered “essential” under Governor Inslee’s order include:
- Healthcare / Public Health;
- Emergency Services;
- Food and Agriculture;
- Water and Wastewater;
- Transportation and Logistics;
- Communications and Information Technology;
- Critical Manufacturing;
- Hazardous Materials;
- Financial Services;
- Defense Industrial Base; and
- Other Community-based Government Operations and Essential Functions.
Federal Small Business Administration (SBA) Loans
Up to $7 billion in low-interest loans are available through the “Economic Injury Disaster Loans” program administered by the SBA, and specifically, the SBA’s “Injury Disaster Loan” program. Approval is on a case-by-case basis and only upon application. The critical points are:
- Eligibility. Certain small businesses located in an “eligible disaster area” (includes Washington) are eligible.
- Use of Funds. Funds can be used to cover debts, accounts payable, payroll and other bills in which COVID-19 has impacted the business’s ability to pay.
- Term. The term is no longer than thirty (30) years. The SBA determines each qualifying business’s capacity for making monthly loan payments on an individual basis.
- Maximum Amount. Qualifying businesses can loan up to $2 million individually, but the amount of the loan is determined by the SBA’s conclusion of a business’s actual economic injury and financial urgency.
- Interest Rate. For small businesses, the interest rate of these loans is 3.75%. For non-profits, the interest rate of these loans is 2.75%.
Relief from the Washington State Department of Revenue (DOR)
In recognition of the “profound impact” on Washington businesses, the Washington State DOR is providing Washington businesses with certain tax relief, including the following:
- Extension of Tax Return Deadlines. Upon request, the DOR will provide the following extensions for paying tax returns. Note that this extension applies even if such request is made after the deadline, but cannot be made on returns that have already been paid.
- Sixty (60) days for monthly returns (this applies to the February 2020 and March 2020 returns at this time);
- Thirty (30) days for the Quarter 1 2020 return; and
- Thirty (30) days for the Annual 2019 return
- Modification of Current Payment Plans. Upon request, the DOR will work with taxpayers to extend or modify their current payment plans.
- Waiver of Interest and BLS Fees. The DOR has the authority to waive interest and business license renewal late fees through April 17, 2020 (the DOR notes that taxpayers should “check back to see if this date gets extended”).
- Requesting Relief. Washington businesses can request the relief above by sending a secure email in their “My DOR” account or by calling the DOR’s customer service staff at 360-705-6705, Monday through Friday 8 a.m. to 5 p.m.
As of the time of this writing, the federal government is finalizing a federal stimulus package. We will provide an update should that stimulus package pass into law. For additional questions, or assistance with your Washington state business, please contact Derek Crick at 206-654-2217 and Jason Parfet at 206-654-2249.
Because each situation is different, this information is intended for general information purposes only and is not intended to provide legal advice on any specific facts and circumstances. Ryan, Swanson & Cleveland, PLLC is a full-service law firm located in Seattle, Washington.