We are delighted to share with you that on December 8th, Senators Ben Cardin (D-MD), Patty Murray (D-WA) and Sherrod Brown (D-OH) introduced the Restaurant Revitalization Tax Credit Act (RRTC) to support the nearly 200,000 independent restaurants and bars that applied for a Restaurant Revitalization Fund (RRF) grant and did not receive the assistance they needed. 

The introduction of the RRTC comes at a pivotal moment for the restaurant and bar industry, which lost over $280 billion in the first year of the pandemic alone and received a mere $28.6 billion in dedicated RRF relief. These neighborhood businesses are still suffering from the revenue-hampering environment created by the pandemic, as food costs continue to rise.  This desperately needed relief will help keep the lights on and the doors open of the small restaurants and bars that are the heartbeat of every community across the country and one of the nation’s largest private sector employers.

This legislation would establish a special tax credit available to businesses that applied for the Small Business Administration’s RRF program, but were unable to receive a grant because the program ran out of funding. The credit may be used to offset employment taxes up to $25,000 per quarter in 2023 and is refundable up to a total of $25,000 for all four quarters for employers that had an average of 10 or fewer employers in the fourth quarter of 2022. The cap on refundability is reduced by $2,500 for each additional employee over 10. 

If passed, the RRTC would be open to RRF applicants that: 

  • were eligible for, but did not receive an RRF award due the program running out of funding
  • experienced an average reduction in gross receipts in 2020 and 2021 of greater than thirty percent as compared to 2019 or a reduction in gross receipts of greater than fifty percent in either 2020 or 2021 as compared to 2019
  • were in operation prior to March 14, 2020
  • paid payroll taxes in at least two quarters during 2021

As long as locally owned restaurants and bars are still hurting, we will keep fighting. The pandemic left independent restaurants and bars with rising costs, reluctant customers, and mounting debt. These headwinds continue to be insurmountable for many businesses through no fault of their own. 

The IRC is thrilled to see Senators Cardin, Murray and Brown stand together to protect this industry. The IRC is currently reaching out to every Member of Congress to join in this effort and we encourage all who support our industry to do the same.

The IRC has posted a detailed explanation of the how the tax credits will work here.