After being introduced to both the Senate and the House in Dec. 2022, the Restaurant Revitalization Tax Credit Act is being reintroduced to the new 118th Congress by Sens. Ben Cardin (D-Md.), Sherrod Brown (D-Ohio) and Patty Murray (D-Wash.). The legislation would create a special tax credit in 2023 for those who applied for, were eligible for, but did not receive a Restaurant Revitalization Fund grant because the U.S. Small Business Administration ran out of money.
“We have not forgotten about these restaurants. They have been hurting for too long,” Senate Finance Committee chair Sen. Cardin said in a statement. “The Restaurant Revitalization Fund was a timely program that simply did not have enough funds to cover the intense demand. I’ve heard from many restaurant owners who, having missed out on these funds, used their personal retirement savings or put their homes up as collateral to keep their businesses afloat. This tax credit will help ease their burden. It will support the restaurants we love while helping to boost our local economies.”
Nearly two-thirds of eligible applicants — or 175,000 businesses — did not receive funding from the original $28.6 billion of RRF grants awarded to restaurants in 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.
As specified when the legislation was introduced the first go-around, the details of the bill are as follows:
The tax credit is available to eligible employers who applied for the Restaurant Revitalization Fund in 2021 but did not receive funding, to offset payroll taxes of up to $25,000 per quarter in 2023
For businesses with 10 or fewer employees, the credit is refundable up to a total of $25,000, and the cap on refundability is gradually phased out for businesses with fewer than 20 employees.
Eligible businesses must have been in operation on or before March 14, 2020, have paid payroll taxes for at least two quarters in 2021, and must also have experienced average operating losses of at least 30% in 2020 and 2021 as compared to 2019, or losses of at least 50% in either calendar years 2020 or 2021 as compared to 2019.