Shuttered Venue Operators Program
Scheduled to Open in Early April 2020

COVID-19 Business Update
Tax Group

The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, the COVID-19 relief bill that was signed into law in late December 2020 included the Shuttered Venue Operators Grant (SVOG), a $15 billion program.  The U.S. Small Business Administration (SBA) expects to begin accepting applications in early April for the SVOG program.

Entities eligible for an SVOG, per the Economic Aid Act, may be live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators, and talent representatives. Entities of those types owned by state or local governments are eligible to apply if the governmentally owned entity acts solely as a venue operator, such as for a museum or historic home, and does not also run other types of entities. For example, a city parks and recreation department that operates a bandstand in a public square but also runs several nature parks would be ineligible to apply for an SVOG.

In addition, SVOG grant applicants must meet the following eligibility requirements.

• Must have been in operation on February 29, 2020.
• Must have defined performance and audience spaces with fixed seating (which is defined as seating permanently fixed to the floor or ground.) The Economic Aid Act does not allow for temporary, removable, modular, convertible, or other non-fixed seating arrangements. This means that mobile entities such as a circus, fair, or business that provides talent for events such as weddings are not eligible for a Shuttered Venue grant if they do not meet the performance space and fixed seating requirements.
• Outdoor venues can apply for an SVOG if they are otherwise eligible under the rules for their type of entity. For example, a drive-in movie theater without fixed seating does not meet the requirement that a motion picture theater operator must have at least one auditorium with a motion picture screen and fixed audience seating.

A venue operator is not eligible for an SVOG if any of the following apply.

• It is a publicly traded corporation or is majority owned and controlled by a publicly traded corporation.
• It presents live performances or sells products or services of a prurient sexual nature.
• More than 10% of its 2019 gross revenue came from the federal government (not counting disaster assistance).
• It owns or operates venues, theaters, museums, or talent agencies in more than one country; owns or operates venues, theaters, museums, or talent agencies in more than 10 states; AND it had more than 500 employees as of February 29, 2020.

The $1.9 trillion American Rescue Plan Act, H.R. 1319 includes an additional $1.25 billion in funding for the SVOG program and also allows eligible entities that receive a first- or second-draw Paycheck Protection Program (PPP) loan after December 27, 2020, to also receive an SVOG. Receiving or even having open applications for both programs had been prohibited, but the new law makes it possible for venue operators to receive both, provided the amount of the SVOG is reduced by the amount of PPP funds approved

Additional, more specific questions about entity eligibility are covered in the Shuttered Venue FAQs, published by the U. S. Small Business Administration.

The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation