No runway extension yet, says SBA

      A new law that allows some small businesses to remain small for longer is not yet in effect, according to the Small Business Administration.

      The “Runway Extension Act” affects small firms in industries in which small size status is determined by annual receipts. It became law last month.

      The law states that those small businesses can report their average annual receipts over a period of five years, instead of three years as was the case previously.

      However, the law did not include an effective date, and there has been some confusion over whether the law went into effect immediately.

      The SBA put out an Information Notice stating that the law is not in effect until the SBA completes the rulemaking process.

      However, federal courts in the past have ruled that laws without effective dates are effective immediately, making the SBA’s interpretation potentially subject to a challenge, according to Jacqueline K. Unger, associate with PilieroMazza PLLC.

More information:
SBA Information Notice: https://bit.ly/2TLyRkL
PilieroMazza Blog entry: https://bit.ly/2srQ8nu

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