Articles
June 27, 2024
Summer series tackles health inspections and getting every tax break you can
Industry and policy experts offer solutions to help ease operational issues.
The webinars focused on how operators can uphold food safety standards and fight to keep the current tax code and tax policy in play.
The National Restaurant Association delivered two presentations offering tips and information on food safety and tax advantages to put into practice today. The webinars, part of its Summer Operator Series, featured the perspectives of industry executives and Association subject matter experts.
The first, moderated by Patrick Guzzle, the Association’s VP of Food Safety, focused on the role health inspections play in upholding food safety standards, the misconceptions about what those inspections entail, and how violations affect a restaurant’s success.
The second, moderated by Aaron Frazier, VP of Public Policy, addressed federal and state policies and tax credits currently available for hiring justice-involved individuals, deducting new kitchen equipment expenses, and preserving more pre-taxed business income.
“The more pieces of the puzzle that can point us in the right direction of what's causing a problem is hugely beneficial,” he said. “We pull every report, every health inspection report from every restaurant, and map each individual finding to a question that exists on our third-party audits. We use that as a big validation tool. If we have two different entities telling us something is occurring in one of the restaurants, it takes away questions or possibilities about how an inspector is interpreting a code or law.”
Monk also said maintaining relationships and communication with stakeholders, like franchisees and state and local health departments, is essential to success.
“We encourage our operators—our licensees—to build relationships the minute they open their restaurants,” he said. “We encourage them to communicate and even over-communicate. If an operator is in a scenario where a local health department feels like there’s little to no transparency, they’ll respond in kind.”
Jamie DeMent, senior food safety consultant for the Walt Disney Co., said Walt Disney World in Orlando, Fla., deals with three of six regulatory agencies involved in food safety. Therefore, they must be nimble and communicative when working with them.
“We want to have open communication with them,” she said. “We want to welcome inspectors into our location and try to assist them and make their jobs easier. Whenever they walk onto the property, we walk them through our processes and make sure everyone knows what’s happening in our kitchens and can share that information with the inspectors. We work to collaborate with them. Inspectors do pop up for unannounced inspections, so when they call and say they’re on the property, we run to meet them and help facilitate the work they’re doing.”
Why? Because some tax provisions will expire at the end of 2025 and set a lot of precedent during the next year, he said.
“The tax code and tax policy touch restaurants at almost every level of activity within our industry,” Frazier noted. “In this great restaurant sector, we have 15.5 million employees, do a ton of hiring, and there's a credit for hiring people who traditionally face barriers to employment. It’s called the Work Opportunity Credit (WOTC) and it’s extremely important.”
“When the industry is hiring, these tax credits and policies help, especially in an industry known for its thin margins of 3% to 5% on average," he added. "That’s one of the big reasons the Association pays close attention to the federal tax code in Washington, D.C.”
Jeff Aldis, tax manager for Texas-based Pappas Restaurants, shared his concern that several of the tax policies benefiting restaurant businesses would expire and not return.
“The WOTC is constantly under consideration to be done away with, and we must fight to keep it,” he said. "And the tip credit, vitally important to anyone with tipped employees, is under direct assault. Bonus depreciation is also being phased out and we only have a few years to get it extended or made permanent. The Association has been fighting hard to keep these in the tax code to save us all a lot of money."
Citing the economic challenges the industry is facing—the cost of goods and labor especially—Aldis told the audience they must join the fight to keep the tax credits and deductions in play.
“We can’t let these breaks get taken away, especially in this still fragile economy,” he said. “We need to make sure we’re competitive within our code, for the mom-and-pops, the regionals, independents and small businesses, because that’s really where we’ll see a healthy and vibrant Main Street.”
Hear the full webinar discussions; download the food safety and policy webinars On Demand. To stay informed on tax issues, bookmark RestaurantsAct, and for all food safety resources, log on to Foodsafetyfocus.com.
The first, moderated by Patrick Guzzle, the Association’s VP of Food Safety, focused on the role health inspections play in upholding food safety standards, the misconceptions about what those inspections entail, and how violations affect a restaurant’s success.
The second, moderated by Aaron Frazier, VP of Public Policy, addressed federal and state policies and tax credits currently available for hiring justice-involved individuals, deducting new kitchen equipment expenses, and preserving more pre-taxed business income.
Cracking the code on health inspections and violations
David Monk, senior director of food safety culture for Chick-fil-A, told webinar participants that his team uses all data and inputs they receive from health inspectors and their own quarterly third-party auditors. They take the information, assess it, determine the greatest risks for the chain, and then develop mitigation strategies to eliminate them.“The more pieces of the puzzle that can point us in the right direction of what's causing a problem is hugely beneficial,” he said. “We pull every report, every health inspection report from every restaurant, and map each individual finding to a question that exists on our third-party audits. We use that as a big validation tool. If we have two different entities telling us something is occurring in one of the restaurants, it takes away questions or possibilities about how an inspector is interpreting a code or law.”
Monk also said maintaining relationships and communication with stakeholders, like franchisees and state and local health departments, is essential to success.
“We encourage our operators—our licensees—to build relationships the minute they open their restaurants,” he said. “We encourage them to communicate and even over-communicate. If an operator is in a scenario where a local health department feels like there’s little to no transparency, they’ll respond in kind.”
Jamie DeMent, senior food safety consultant for the Walt Disney Co., said Walt Disney World in Orlando, Fla., deals with three of six regulatory agencies involved in food safety. Therefore, they must be nimble and communicative when working with them.
“We want to have open communication with them,” she said. “We want to welcome inspectors into our location and try to assist them and make their jobs easier. Whenever they walk onto the property, we walk them through our processes and make sure everyone knows what’s happening in our kitchens and can share that information with the inspectors. We work to collaborate with them. Inspectors do pop up for unannounced inspections, so when they call and say they’re on the property, we run to meet them and help facilitate the work they’re doing.”
Preserving profit…and why restaurants must engage
The Association’s Frazier told participants that effective use of federal and state tax policy could mean the difference between restaurant profit and loss, and that the next 18 months could be the most critical for tax policy during the next decade.Why? Because some tax provisions will expire at the end of 2025 and set a lot of precedent during the next year, he said.
“The tax code and tax policy touch restaurants at almost every level of activity within our industry,” Frazier noted. “In this great restaurant sector, we have 15.5 million employees, do a ton of hiring, and there's a credit for hiring people who traditionally face barriers to employment. It’s called the Work Opportunity Credit (WOTC) and it’s extremely important.”
“When the industry is hiring, these tax credits and policies help, especially in an industry known for its thin margins of 3% to 5% on average," he added. "That’s one of the big reasons the Association pays close attention to the federal tax code in Washington, D.C.”
Jeff Aldis, tax manager for Texas-based Pappas Restaurants, shared his concern that several of the tax policies benefiting restaurant businesses would expire and not return.
“The WOTC is constantly under consideration to be done away with, and we must fight to keep it,” he said. "And the tip credit, vitally important to anyone with tipped employees, is under direct assault. Bonus depreciation is also being phased out and we only have a few years to get it extended or made permanent. The Association has been fighting hard to keep these in the tax code to save us all a lot of money."
Citing the economic challenges the industry is facing—the cost of goods and labor especially—Aldis told the audience they must join the fight to keep the tax credits and deductions in play.
“We can’t let these breaks get taken away, especially in this still fragile economy,” he said. “We need to make sure we’re competitive within our code, for the mom-and-pops, the regionals, independents and small businesses, because that’s really where we’ll see a healthy and vibrant Main Street.”
Hear the full webinar discussions; download the food safety and policy webinars On Demand. To stay informed on tax issues, bookmark RestaurantsAct, and for all food safety resources, log on to Foodsafetyfocus.com.