Rodney P. Mock (Cal Poly) and Kathryn Kisska-Schulze (Clemson; Academic google), Saving non-essentials with radical tax policy, 90 U. Cin. L. Rev. 197 (2021):
Under the Internal Revenue Code of 1986, as amended, for-profit entities are distinguished from tax-exempt entities in that, among other factors, they pursue profit and enjoy unrestricted business activities. The COVID-19 lockdowns prevented many small for-profit businesses from doing business. For the first time in United States history, a distinction was made between “essential” and “non-essential” businesses. Such a distinction is historically absent in both legal scholarship and tax law; instead, it is a product of the government reaction to the COVID-19 pandemic. Through executive order, non-essential businesses were characterized as trivial to the social fabric and thus closed, while essential businesses were able to remain operational with little to no disruption. Since then, the profits of the essential businesses have accumulated from such consolidation.
To date, there have been no proposals at the state or federal level that adequately address the monumental financial and social impact that mandatory closures have had on small businesses, which employ approximately 47.5% of the private workforce. This article suggests that restructuring and preserving the companies hardest hit by the pandemic serves an overriding public interest, and radical social events require radical fiscal policy initiatives. As such, this article proposes that non-essential businesses adversely affected by pandemic closures be granted temporary tax-exempt status and treated similarly to non-profit organizations throughout their recovery period. economic.