The Restaurant Revitalization Tax Credit Act legislation would be set up to offset payroll taxes for restaurants that applied for and did not receive RRF money
Joanna Fantozzi
While a second round of the Restaurant Revitalization Fund was never passed in Congress, one of the authors of the original legislation is fighting for a tax credit that would give a much-needed boost to restaurants that lost out the first time around.
U.S. Senator Ben Cordin (D-Md.), along with his colleagues Patty Murray (D-Wash.) and Sherrod Brown (D-Ohio) have introduced the Restaurant Revitalization Fund Tax Credit Act, which if passed, would allow the approximately 175,000 businesses that did not receive RRF funding to offset part of their payroll taxes in 2023.
“The Restaurant Revitalization Fund was an essential part of the federal government’s COVID-19 response, but unfortunately, those restaurants that did not get help from SBA are still hurting,” Sen. Cardin said in a statement. “[…] While the pandemic has receded for many Americans, and we have made great strides to regain a sense of normalcy, this is not the case for small restaurant and bar owners still struggling to repay debt accrued during the last two years while facing increasing labor and supply costs. This tax credit will help ease their burden.”
Here's how it would work if the legislation passed:
Eligible restaurant employers who applied for and did not receive Restaurant Revitalization Fund grants would be able to offset payroll taxes of up to $25,000 per quarter in 2023.
For businesses with 10 or fewer employees, they would be able to offset up to $25,000 in payroll taxes for the entire year.
The cap on refundability is reduced by $2,500 for each additional employee over 10.
To qualify, restaurants must also have experienced operating losses of at least 30% in 2020 and 2021 compared with 2019, or losses of at least 50% in either 2020 or 2021 compared with 2019.
Businesses must have been in operation as of March 14, 2020 and must have paid payroll tax in at least two quarters of 2021.
While the second round of the Restaurant Revitalization Fund died in Congress in May, RRF came back into the conversation this fall when the SBA distributed $83 million in leftover funds to 169 restaurants from the first go-around.
“While the American Rescue Plan saved thousands of restaurants, its Restaurant Revitalization Fund left too many behind,” Sen. Murray said in a statement. “I believe we need to replenish the Fund and will keep pressing to do so. Until that happens, bills like the Restaurant Revitalization Tax Credit Act will help keep restaurants afloat. This tax credit would benefit every eligible restaurant that applied to the Fund, but never received a grant through no fault of their own.”
Contact Joanna at [email protected]
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