The U.S. House of Representatives has introduced a companion bill to the Restaurant Revitalization Tax Credit legislation the Senate announced last week. Like its companion bill, the House’s version — introduced by Reps. Earl Blumenauer (D-Ore.), Brian Fitzpatrick (R-Penn.), and Dean Phillips (D-Minn.) — would create a tax credit in 2023 to offset payroll liabilities owed by restaurants that applied and were eligible, but did not receive, the original Restaurant Revitalization Fund.
"Restaurants and their employees were hit harder than any other industry during the COVID-19 pandemic,” Congressman Blumenauer said in a statement. “The federal government has provided some help to these institutions through the Restaurant Revitalization Fund, legislation based on my RESTAURANTS Act. But the program has fallen short, with only one-third of all applicants receiving funding. The Restaurant Revitalization Tax Credit will help fill these gaps and ensure all local restaurants get the support needed to keep their doors open, pay their staff, and protect the industry's trillion-dollar supply chain.”
Here's how it would work:
- The tax credit would be able to offset payroll tax liabilities for eligible restaurants at up to $25,000 per quarter in 2023
- Eligible restaurants include restaurants open before March 14, 2020 that applied for the Restaurant Revitalization Fund in 2021, did not receive any grants, and experienced a loss of revenue of at least 50% in 2020 or 2021, compared with 2019 or a loss of at least 30% in both 2020 and 2021 as compared with 2019
- The credit would be fully refundable for companies with 10 or fewer employees, and partially refundable for companies with between 11-20 employees.
The only discernible difference between the two bills introduced to Congress is that the specifications on eligibility based on number of employees is slightly different, with the Senate legislation stating that the cap on refundability is reduced by $2,500 for each additional employee over 10.
Both bills have been endorsed by the Independent Restaurant Coalition and the National Restaurant Association.
“For the small business operators who hoped the Restaurant Revitalization Fund would help them stay afloat until the chaos of the pandemic settled, this tax credit will create another path to resilience while they deal with the uncertain economic climate,” Sean Kennedy, executive vice president of public affairs for the National Restaurant Association said in a statement.
The bills will likely be heard and voted on when Congress is back in session in Jan. 2023.
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