Restaurant Revitalization Tax Credit Would Help Some Hospitality Businesses that Didn’t Receive RRF Grants

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Representative Blumenauer and Senator Cardin have each introduced the Restaurant Revitalization Tax Credit Act, legislation intended to help hospitality businesses still recovering from COVID-19 by creating a tax credit to offset qualifying businesses’ payroll tax liabilities in 2023.

In 2021, language from the original Restaurant Revitalization Fund (RRF) Act was included in the American Rescue Plan Act, providing $28.6 billion for breweries, restaurants, bars, and other hospitality businesses to help them recover from the impacts of COVID-19. Though breweries were not in the initial RRF bill, the Brewers Association (BA) successfully advocated for breweries to be included as one of the hospitality businesses that qualified for funds. Thanks to those efforts, around 1,600 taprooms and brewpubs received more than $450 million in grants, helping many in the industry cover debts incurred from the previous year.

Though extremely helpful to the businesses that received grants, the RRF did not have adequate funds to meet demand. In total more than $75 billion was requested, resulting in the majority of businesses who qualified for funds not receiving grants. The BA supported subsequent pieces of legislation that would have provided additional funding for the legislation, but despite bipartisan support, nothing was passed last congress.

The Restaurant Revitalization Tax Credit Act was introduced with the intent of helping the more than 177,000 small hospitality businesses who qualified for but did not receive grants from the RRF. The structure of the bill is different from the original RRF language. Instead of providing grants, the Restaurant Revitalization Tax Credit Act would:

  • Create a tax credit to offset restaurants’ payroll tax liabilities at up to $25,000 per quarter in 2023.
  • Be made available to businesses that:
    • Applied for, but did not receive, RRF grants and were open before March 14, 2020.
    • Experienced a revenue loss of at least 50% in 2020 or 2021 (as compared to 2019), or a loss of at least 30% in both 2020 and 2021 (as compared to 2019).
  • Be made fully refundable for employers with 10 or fewer employees and partially refundable for employers with between 11–20 employees (the cap on refundability is reduced by $2,500 for each additional employee over 10).

Many breweries and hospitality businesses are still recovering from the impacts of COVID-19, as well as the subsequent supply chain issues and inflation costs. The Restaurant Revitalization Tax Credit Act would bring some relief, but the legislation faces an uphill battle. The House and Senate are currently under control by different parties, making it harder to pass legislation that doesn’t have strong bipartisan support. Congress is also dealing with priorities like raising the debt ceiling, which decreases the likelihood of other legislation being taken up. BA staff continue to advocate on behalf of our membership and will provide updates on this legislation as it progresses.

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