COVID-19 Update 5/8/2020

MN Workers’ Comp Reporting

Minnesota will allow employers to report/record payroll for paid employees who stayed home during the Stay-at-Home orders under a special code other than their normal classification. These payments will not be used in the calculation of premium so long as the employer keeps detailed records of that payroll. Make sure to keep separate, accurate and verifiable records so that these payroll amounts can be excluded in your next audit.

Additional information can be found here.

MN Legislative Update

AASP-MN lobbyists, Kevin Walli and Sam Richie, report as follows:

The economic dislocations caused by the COVID-19 pandemic are having dramatic consequences for businesses and government entities alike. Governor Walz requested a somewhat more detailed budget and economic outlook for May as a basis for any budget activity that may be forthcoming from the 2020 Legislative Session.

The Report from Minnesota Management and Budget (MMB) presents a significant challenge for the state. The projected surplus of $1.5 billion has vanished – replaced by a deficit of $2.426 billion. The state budget reserve, or Rainy Day Fund, is available to fill gaps created by the reduction of business activity and corresponding loss of revenue.

Probably the most significant statement in the May budget outlook is provided in the final sentence of the single paragraph which MMB used to transmit the budget and economic outlook, “Given the uncertainty about the path of pandemic, the economic outlook will remain volatile for some time.”

Minnesota’s budget and economic outlook has significantly worsened since the coronavirus pandemic. A deficit of $2.426 billion is now projected for the current biennium, which is almost a $4 billion change compared to the February forecast. Revenues are expected to be $3.611 billion lower and spending, including appropriations enacted since February, is expected to be $391 million higher. The $2.359 billion budget reserve remains available to mitigate the budgetary impact of the crisis. Given the uncertainty about the path of pandemic, the economic outlook will remain volatile for some time.

As of May 8th, there are just seven business days left in the 2020 Legislative Session. The Constitution provides that no bills can be passed on the last day of Session — which is Monday, May 18. All we will see on the 18th are the retirement speeches of the Legislators who are not running for re-election.

We do expect there to be a Special Session in June to determine whether and how long the COVID – 19 emergency will continue. One issue which we will be following for AASP-MN is whether additional resources will be brought to bear to help businesses survive the downturn caused by the pandemic. There has been discussion on this front but no bi-partisan consensus.

We will keep you informed of Legislation that would impact the auto repair industry.

City & County Resources Available

Businesses around Minnesota need assistance to withstand the challenges of COVID-19. Many cities and counties throughout the state have grant or loan programs available to businesses, so their local economies can compete and thrive. The Minnesota Chamber’s Grow Minnesota! Partnership has compiled a list of available funding at the city and county level that can be found here.

Members Sharing Resources

During the May 6^th BS Session, AASP-MN President, Matt Feehan, Fix Auto Minnesota, offered to share the following info:

• NFIB Weekly Briefing for Small Business – a slide deck containing federal legislative information as well as details about the Paycheck Protection Program, including calculating and documenting loan forgiveness and other alternative funding options.  Note – this information was current as of 4/22/20 and may be subject to change. 
• PPP Expense Tracker – Excel Spreadsheet

During the May 7th Mech XChange, Seth Thorson and Tony Newman shared the following sources for protecting their employees and customers:

• Neck Gaiter – Tony Newman, Dale Feste Automotive, suggested a neck gaiter as being a good alternative to a face mask.  This is what he’s ordered. 
• Customized Face Mask – Seth Thorson, Eurotech Auto Service, provided the following referral for reusable face masks that can be customized with your logo.  Call Mat Turbes at 763-639-0003 to learn more.  Cost is $7.99 each for AASP-MN members who place a minimum order of 100 masks.

This is what Alliance membership is all about – sharing information and helping each other to strengthen the industry as a whole.  Thank you, guys, for leading by example!

Talking Shop

The Zoom Mech XChange and BS Sessions have proven to be a popular way for members to connect with each other.  The sessions have been informative and inspiring, with members sharing their experiences and advice for dealing with the multitude of changes and challenges that have come their way during this crisis.  At members’ request, follow-up programs have been scheduled as follows: 

• Collision members, attend the BS Session on May 20th.
• Mechanical members, attend the Mech XChange on June 3rd.

Both programs are scheduled from 11:30 a.m. – 12:30 p.m.

AASP-MN Golf Outing Canceled

Unfortunately, due to the current/anticipated requirements for social distancing to stop the spread of the coronavirus, it will not be possible to hold our golf outing on June 16^th at Keller Golf Course.  We are bummed, but the health and safety of our members and the general public take priority over what is normally a fun day of handshakes, hugs and genuine camaraderie.

It remains to be seen whether the event can be rescheduled for later this fall or if it will have to wait until 2021.  Stay tuned…

Rules for PPP Continue to Evolve

Here is a good article outlining the tax implications of receiving a Paycheck Protection Program (PPP) loan.

Additionally, the Small Business Administration (SBA) in conjunction with the Treasury has issued updated PPP Frequently Asked Questions  (here) and a new Interim Final Rule.  The new guidance states that ALL loans in excess of $2 million, in addition to other loans as appropriate, will be reviewed for economic need following the lender’s submission of loan forgiveness application. This action is to further ensure PPP funds go to intended recipients. This is a follow-up to information that large businesses and public companies received at least $1 billion in round 1 PPP funding.

PPP applicants are required to make a number of certifications in connection with their applications, for example concerning their eligibility and the purposes for which they will use the loans. Attention to these certifications is extremely important, given the severe penalties that are possible for submitting false or misleading certifications to the government.

Bonus Depreciation for Capital Expenditures

The law providing relief due to the coronavirus (COVID-19) pandemic contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings. This is referred to as qualified improvement property (QIP). The CARES Act now allows most businesses to claim 100% bonus depreciation for QIP, as long as certain other requirements are met. What’s also helpful is that the correction is retroactive and it goes back to apply to any QIP placed in service after December 31, 2017.  Make sure to ask your accountant if these changes may be beneficial to your business.

CDC Perspective on Handling Vehicle Interiors/HVAC

As reported in the May 5th edition of Repairer Driven News  (RDN), the Center for Disease Control (CDC) responded to the publication’s inquiry regarding methods for treating a vehicle brought to a shop for repair. RDN was following up on a request from the Mobile Air Conditioning Society to the CDC asking for guidelines on cleaning vehicle interiors – particularly HVAC systems – during the COVID-19 coronavirus pandemic.Read More

Note: This content and analysis is for informational purposes only and should not be construed as legal advice. Please consult your legal and financial advisors for detailed information before taking any action.