Restaurant Revitalization Tax Credit Act This bill allows certain restaurants affected by the COVID-19 pandemic a credit against payroll tax liability up to 100% of the wages paid to their employees, not to exceed $25,000 in any calendar quarter.
If enacted, SB28 would significantly amend the Internal Revenue Code by establishing a new framework for payroll tax credits aimed specifically at restaurants. This legislation addresses the financial difficulties many of these businesses faced during the pandemic-related economic downturn, helping them to retain employees and stabilize their operations. The credit is partially refundable, meaning employers can receive some reimbursement, potentially easing cash flow challenges while supporting job retention in the sector.
Senate Bill 28, known as the Restaurant Revitalization Tax Credit Act, aims to provide financial relief to restaurants impacted by the COVID-19 pandemic. The bill allows eligible employers, particularly those within the restaurant industry, to receive a payroll tax credit that covers 100% of the wages paid to employees for each calendar quarter. However, this credit is capped at a maximum of $25,000 per employer per quarter, encompassing various stipulations to ascertain eligibility based on prior earnings and operational status during the pandemic.
While the intent behind SB28 is to bolster the struggling restaurant sector, there are aspects that may lead to contention in legislative discussions. Previously established guidelines for eligibility, including ensuring employers did not receive grant funds due to a lack of funding and meeting gross receipts criteria from 2019, pose barriers that could exclude some businesses. Critics may argue that such limitations could undermine the bill's effectiveness in providing widespread relief to all deserving establishments. Additionally, the coordination with the Small Business Administration for identifying eligible employers could present bureaucratic challenges, potentially complicating access to the benefits offered under this proposed law.