Just The Tax: Restaurant Relief

This applies to me if …

You owned and operated a ‘restaurant’ (*see below for what qualifies*)  in 2020 or know someone who did.

What’s new?

Included in the American Rescue Plan Act of 2021 (the “ARP”) is the Restaurant Revitalization Fund (“RRF”) - which sets aside $28.6 Billion for restaurants. Applications for relief are expected to be available within the day. And we presume that no different than the other programs, there will be more dollars requested than are available. As such, time is of the essence in applying for relief if you qualify.

Why should I care?

According to the National Restaurant Association, restaurants have lost more than $250 billion due to the pandemic. If you qualify for relief, the RRF provides much needed and sweeping relief for restaurants - up to $10m per entity or $5m per physical location (along with other economic relief we have shared in prior updates). It is important to note that these dollars are a grant, not a loan - and in some cases can make a restaurant whole from their prior years’ losses. For the first 21 days of the application period, applications from small businesses owned by “women, veterans and socially and economically disadvantaged individuals” will be given priority.

The definition of restaurants is broad. It includes restaurants, food stands, food trucks, food carts, caterers, saloons, inns, taverns, bars, lounges, brewpubs, tasting rooms, taprooms, licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products.

Similar to the PPP, the program will be administered by the Small Business Administration. From experience, the SBA has been inundated with more applications than available funding so if you qualify, it is imperative that you are ready to submit an application for relief the moment their application portal opens. 

For more information

You can sign up for updates directly from the SBA at this link.  In addition, we recommend that you frequently check the site for additional information and, as always, we are here to help.

How can we help?

If you have questions about the RRF or the ARP and whether you qualify for any of the benefits, please let us know. We will continue to monitor changes to the programs and inform you as we discover them. And, again, we sincerely appreciate your patience as we work with our clients in navigating through this unprecedented series of changes to the tax  code and economic stimulus. 

The fine print

This is a very high level summary of the RRF. The rules around what costs qualify for grant dollars are nuanced - and they are layered with all the other economic stimulus available to restaurants. We draft these Tax Tips to assist you. That said, they do not consist of tax advice nor are they intended to be a comprehensive summary of the tax law. If you have specific questions please let us know and we are always happy to assist you.