Policy Brief

Most restaurants are small businesses that operate on very thin margins – often with just 16 days of cash on hand. Tax policies like the Employee Retention Tax Credit (ERTC) and the Small Business Tax Deduction have allowed restaurants to invest in hiring, training and professional development. However, the Infrastructure Bill passed by Congress in November 2021 cuts short the ERTC, and other legislation would raise the threshold at which the Small Business Tax Deduction gets applied. 

The Association supports the bipartisan ERTC Reinstatement Act, which was introduced in the fall of 2021 to restore ERTC for Q42021.

Additionally, the Permanently Preserving America’s Investment in Manufacturing Act (S. 1077/H.R. 5371) would permanently restore an invaluable tax tool known as EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) that will help restaurants manage rising interest rates and grow in the short and long-term.  

If these bills do not pass before the end of 2022, they must be introduced again in the 118th Congress. 

Countless restaurants are still struggling to survive and rebuild from the pandemic. Penalizing them with harsh tax policies will force many more to close their doors for good.