UPDATED: NC Business Recovery Grants Prioritize Arts & Hospitality
This article was updated on December 20, 2021
The FY2021 state budget allocated $500 million to create the Business Recovery Grant program to provide relief to businesses and sole proprietors that file state business income tax (NC Form E-500) including nonprofits that pay Unrelated Business Income Tax (UBIT), which were negatively impacted by the pandemic. The grants and funding will be divided into two categories, setting roughly $300 million aside for Hospitality Grants for businesses in the arts, entertainment, recreation, accommodations, and food services industries, and Reimbursement Grants using the remaining $200 million for businesses in all other industries that have not received previous relief funding (PPP, SVOG, etc.). Businesses that lost 20% or more of their revenue in the first 12 months of the pandemic, compared to the prior 12 months will be eligible for grants equal to 10% of lost revenue, up to $500,000, or 20% of lost revenue if no prior relief funding has been received.
Arts NC is grateful that advocacy across the “hospitality sector,” including arts and entertainment, was heard and that the NC General Assembly recognized the devastating financial impact felt by these industries. We encourage all eligible businesses, artists, and agents that file NC business income tax (NC Form E-500) including nonprofits that pay UBIT on revenue not directly related to the purpose that is the basis for their tax-exempt status (such as concessions or merchandise at a performance venue) to apply for a NC Business Recovery Grant. Visit the NC Department of Revenue Business Recovery Grant website which contains updated information about eligibility, applications, awards and FAQs as well as resources to help spread the word about this valuable opportunity for arts businesses. The application was opened on December 16, 2021, and the deadline to apply for Business Recovery Grants is January 31, 2022.
NC Business Recovery Grants Summary
Who is eligible for Hospitality Grants? Businesses or individuals that are subject to NC corporate taxes (those filing a NC Form E-500 or partnerships using an IRS Form 1065), including nonprofits that pay UBIT, and that are tracked using NACIS Codes beginning in 71 (Arts, Entertainment, Sports) or 72 (Hotels, Restaurants, Bars) who can show a 20% “economic loss.” Economic loss will be the difference of the gross receipts from the “COVID Period” (March 1, 2020 through February 28, 2021) subtracted from the gross receipts of the prior 12 months (March 1, 2019 through February 29, 2020).
Who is eligible for Reimbursement Grants? All other businesses or individuals that have not received relief funding from one or more of the listed sources (NC Job Retention Program, Paycheck Protection Program, EIDL Advance, Shuttered Venue Operators Grant, or Restaurant Revitalization Fund), are subject to NC corporate taxes (those filing a NC Form E-500 or partnerships using an IRS Form 1065), including nonprofits that pay UBIT, and who can show a 20% “economic loss.” Economic loss will be the difference of the gross receipts from the “COVID Period” (March 1, 2020 through February 28, 2021) subtracted from the gross receipts of the prior 12 months (March 1, 2019 through February 29, 2020).
How much is the Award Amount? Hospitality Grants for businesses which have received relief funding from one or more of the listed sources (PPP, SVOG, etc.) will be eligible for an award equal to 10% of their “economic loss,” up to $500,000. Economic loss will be the difference of the gross receipts from the “COVID Period” (March 1, 2020 through February 28, 2021) subtracted from the gross receipts of the prior 12 months (March 1, 2019 through February 29, 2020). Business Recovery Grants for entities that have not received previous relief funding will be awarded 20% of their “economic loss,” up to $500,000, as determined by the same method.
How will available funding impact Awards? Eligible businesses will receive Hospitality Grants from the roughly $300 million allocated, and all other businesses will receive Reimbursement Grants from the remaining $200 million. Should more funding be requested than available in each category, then awards will be reduced proportionally across awardees in that grant category. However, businesses receiving Hospitality Grants who have not received prior relief funding (PPP, SVOG, etc.) will be awarded their full grant amount before the remaining funds are distributed proportionally to the other Hospitality Grant awardees.
How do I apply and when are applications due? For more information and to apply, visit the NC Department of Revenue Business Recovery Grant website. The application was opened on December 16, 2021, and the deadline to apply for Business Recovery Grants is January 31, 2022.