NRF Urges White House to Bail Out Retailers
The National Retail Federation has sent a letter to President Trump and other federal officials outlining the steps they should take to minimize the impact of the coronavirus pandemic on retailers.
The letter sent to President Trump, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Senate Minority Leader Charles Schumer, House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy offers support of the federal government's efforts in terms of public health but mentions the broader economic implications of the pandemic on retailers.
"The retail industry is being dramatically impacted by social distancing that is both voluntary and publicly mandated, and our members tell us that the most important support they can get from the federal government would be access to credit that can sustain them until consumers are back in the marketplace," the letter states. "Labor and benefit obligations, rents, loan payments are all crippling burdens if no sales are being made for days or weeks at a time, and our members are suffering cumulative losses that amount to tens of billions of dollars a week.
Certainly, consideration of a mandatory default and foreclosure stay or directions from federal authorities on rent abatement might provide some needed relief for retailers faced with closure orders. With much uncertainty over the length of this crisis, however, a direct, government-backed loan program might be particularly helpful in achieving the goal of providing a bridge to the resumption of normal business operations.
Certain tax changes can also improve liquidity. For example, the administration’s action yesterday to delay tax filings and payments for 90 days provides additional liquidity is welcome news. Allowing businesses to file amended returns to recoup their overpayment of taxes as a result of the error in the qualified improvement property provision of the 2017 tax law would also return as much as $15 billion a year to retail, restaurant and hotel businesses.
Reinstating the net operating loss carryback (NOL) would also allow businesses that are losing money this year to monetize those losses earlier than otherwise allowed by applying them against past years’ taxable income.
Finally, all our members are extremely focused on sustaining their workforce even if they have to close stores temporarily. Assistance in providing for payroll costs might help slow layoffs that will be inevitable if retail sales continue to collapse. Expanding the employee retention tax credit to businesses that are suffering financial losses because of this crisis would help to offset payroll costs at a time when sales are in a decline."
The letter is signed by Matthew R. Shay, president and CEO of the National Retail Federation.
