Congress Approves $15 Billion In Grants To Shuttered Live Venues: A Closer Look

people. need. Fun

Yes, this is not news, but given the current climate, this must be repeated.

The "Hamilton" music sign hangs outside the Richard Rogers Theater in the Times Square area

In some psychology circles, they describe the importance of the "resistance to anger" ratio to human psychology. Even in the best of times, we are full of anger, whether it is conscious or unconscious. However, as long as we can consistently bring happiness to ourselves, we can maintain a balance.

However, what we currently see in our country is the consequence of the ratio of collective comfort to anger, and this danger may not be unified.

People are very angry. The pandemic makes us feel fear and isolation. Politics and social media divide us and distrust. John Kreese returned to the San Fernando Valley to teach a group of impressed teenagers his strike priority karate brand. There are many things to be angry about.

However, under normal circumstances, we can deal with this public anger. Our anger will not go away, because we have a way to soothe ourselves, and then deal with colleagues, throw empty whiskey bottles at the referee, or, oh, I don’t know... rush into the Capitol.

But at present, where can we go to relax? Since March, most parts of the country have been closed, and even in those areas that are still open, the places where people rely on steaming have already been closed.

Think about the hard work of the past year. How many shows and dancing with the band have you missed. Or laugh live with your favorite comedian. Or take the kids to the movies, fill your face with Butterfinger Minis, and see what the recent quirk, Kevin Hart, has put in.

I know I feel bad. I like the live venue. Like most people, I always prepare the most advanced list:

Frank Turner. The Boulder Company, 2019.

Book of Mormon. New York, New York, 2011.

Dave Chapel. Denver Corporation, 2002.

Museum...well, I don't have one. I tend to keep pace with Homer in this respect: the best things in life never end with "enumeration". They end in "crazy" or "standard".

At present, although it used to be routine work, these experiences can never be satisfied. Contrary to the idea of ​​hundreds of strangers squeezing into the theater, since the COVID rushed ashore, our sense of self-protection has dominated our every move.

It’s hard to imagine, but we

Do it again. We will laugh, dance, and plug our arteries with cinema butter. When that time comes, we will attack those experiences with a vigor that has never been seen since the roaring twenties.

But... we will need to make sure that when we are ready, there are still many places to go. We must keep concert halls, cinemas, and museums, which is a daunting task, given the losses caused by the pandemic to these industries.

Fortunately, Congress has a plan. In the 5,500 pages of the latest spending and stimulus bill, the government has allocated $15 billion in grants to help places of living survive the pandemic. But how does it work?

Let's see…

In order to receive funding, companies must engage in certain jobs. These companies can be for-profit organizations, non-profit organizations or government-owned. They can be companies, limited liability companies, partnerships, or sole proprietorships.

The new law divides eligible recipients into four categories. The first category contains subcategories.

This category also contains

live performance

And those

On-site venue. For this purpose, live performances include concerts, comedy performances, dramatic works or other activities of performing artists. Let's break down two sub-categories...

To meet this definition, the business must have three characteristics.

1. It must charge a surcharge through ticket sales or front door entrance fee.

2. The remuneration of performers must be based on a percentage of sales, a guarantee (written or standard contract) or other mutually beneficial formal agreement, and

3. Within the scope of on-site activities, underwriting costs or ticket sales, production expenses or production reimbursements, non-profit educational activities or activities, beverages, and food sales, no less than 70% of the business income or commodities generated.

In addition, "on-site venue operators or promoters, theater producers or on-site performing arts organizations and operators" include companies that sell tickets to the public, and the event is conducted in the form of a live concert no less than 60 days before the event date on average Performances by performing artists, comedy performances, dramatic works or other activities.

Once again, to qualify for the competition, a certain percentage of fees must be paid for the performers of these live events, based on the percentage of sales, a guarantee (written or standard contract) or other reciprocal formal agreement.

The relevant museum is a "museum" as defined in Article 273 of the "Museums and Library Services Act" (20 USC 9172). I don't know what this means, but if you are reading this book and have a vested interest in this definition, you might do it. However, it does not include any museums organized for profit.

This category includes businesses that own or operate at least one public place that pays for film screenings. Simply put, it is a cinema.

Finally, "talent representatives" are eligible for funding. This includes agents or managers who perform the following three actions:

1. No less than 70% of the business representing or managing artists and entertainers;  

2. Books or representing musicians, comedians, actors or similar performing artists mainly in venues or live events at festivals; and

3. On behalf of musicians, comedians, actors or similar artists, the amount paid is based on the number of tickets sold or similar benchmarks.

Once it is determined that the company is a live operator or promoter, a theater producer or a live performing arts organization operator (again collectively referred to as a "live operator"), a related museum operator, movie theater operator or talent representative, the company must meet the following seven requirements: Requirements:

1. It must have been fully operational on February 29, 2020;

2. Total income during 1 period

,2

, 3

Or 4

The second quarter of 2020 is less than 75% of the same period in 2019;

3. From the grant date:

4. The enterprise cannot have any of the following characteristics: it cannot be publicly traded, or it cannot receive more than 10% of its income from federal funds during 2019. Similarly, the business cannot be owned or controlled by an entity with any of the above characteristics.

5. The business cannot have more than two of the following characteristics:

6. No stripe club, and

7. In the end, the company cannot obtain the "Salary Protection Program" loan-the first round or the new second round-

.

Next, there are requirements for the type

Participate in business.

For on-site venue operators, the venue in which the company promotes, produces, manages or holds events (for talent representatives, it is a venue for artists to perform) must have the following characteristics:

The cinema must have:

The museum must have:

After the enterprise meets all the relevant requirements above, it is eligible to receive the grant. It should not be difficult to require companies to prove that the economic uncertainty caused by COVID-19 made the grant necessary. The initial grant is usually equal to the smaller of three amounts:

1. 45% of total business revenue in 2019,

2. If the business started after January 1, 2019, the amount is equal to the product of 6 multiplied by the total average monthly income of the business for each month of operation in 2019, or

3. US$10 million.

Grants will be prioritized: in the first 14 days available, the grants will flow to businesses whose revenues are at least 90% less than their revenues during the period from April 1, 2020 to December 31, 2020. During the same period in 2019 get on. In the next 14 days, priority will be given to those businesses that have lost at least 70% of their revenue in comparison between the two periods.

For this reason, the accrual basis will be used to determine income, and any amount received under the CARES Act (ie, grants allowed by the Act) will not be counted as income. It seems that companies must be able to determine that the loss of revenue is attributable to COVID-19, which is not a big obstacle to overcome. Finally, seasonal businesses can adjust traditional revenue calculations.

Generally, every eligible company (even if it is associated with other companies) is also eligible for its own grant. However, none of the five corporate entities in any "associated group" can receive grants. For museums, the maximum grant of any museum operator is $10 million, regardless of the number of museums in operation.

If, starting from April 1, 2021, the business revenue in the most recent calendar quarter is at least 70% less than the revenue in the same quarter in 2019, supplementary grants can also be used. The grant will account for 50% of revenue in the same quarter of 2019. Initial grant, but between the initial grant and supplementary grant, the total amount received cannot exceed US$10 million.

The grant must be used for expenses between March 1, 2020 and December 31, 2021 (for the initial grant, or as late as June 30, 2022 for the supplementary grant). If it is not used up by the relevant deadline, the funds must be returned within one year from the date of grant. Therefore, for companies that borrowed this month, any money that was not spent before December 31, 2021 needs to be returned in January 2022. Unused supplementary grants must be repaid within 18 months from the date of payment.

The grant must be used for certain expenditures. Eligible expenditures include salary costs, mortgage interest, rent and utilities (to assume obligations that existed before February 15, 2020), and employee protection fees as defined in the salary protection plan. In addition, the funds can be used to pay for expenses to independent contractors (the annual compensation paid to any one service provider must not exceed $100,000), or for maintenance costs, administrative costs, state and local taxes, operating leases, insurance premiums, Advertising, production transportation and certain capital expenditures. Funds cannot be used to purchase real estate, repay loans generated after February 15, 2020, invest or reuse funds, or donate to political parties.

As with all grants of this amount, companies will need to retain documents that prove eligibility and use of funds. The eligibility and use of funds can be audited, and legal actions can be taken if fraud is discovered.

However, what is not clear at the time of writing is the most important information: when can the grant be used? After all, as mentioned above, after prioritizing grants, companies will want to join the ranks as soon as possible.

Finally, the latest stimulus bill clearly states that: 1) the receipt of the grant is not taxable; on the contrary, the grant represents tax-free income, and 2) any expenses paid with the grant can be fully deducted.

Soon, our country’s concert halls, theaters and museums will reopen, and people will flock to them, eager to enjoy the long-lost fun. It cannot happen soon, because only when we re-recognize the carrot-top comedy style can the revival of this great country really begin.

I am the tax partner of Rubin Brown in Aspen, Colorado. I am a certified public accountant in Colorado and New Jersey and hold a master's degree in taxation from the University of Denver. mine

I am the tax partner of Rubin Brown in Aspen, Colorado. I am a certified public accountant in Colorado and New Jersey and hold a master's degree in taxation from the University of Denver. My specialty is company and partnership taxation, with a focus on complex merger and acquisition structures. In my free time, I like to drive around in a van with my dog ​​Maci to solve the mystery. As we all know, I can complete the "New York Times" Sunday crossword in less than 7 minutes, just looking back and using only synonyms. I invented wool, but because of modesty, I can't believe sheep. Dabbling in the art of cooking, I have won every chili cooking competition I have ever participated in, but I have not won. Finally, and perhaps most notably, I used to sing the national anthem at the World Baseball Games even though I was not near the microphone at the time.