On March 15, the Small Business Administration announced a deferment extension for future payments on COVID-related Economic Injury Disaster Loans (EIDL). This deferment extension of up to 30 months is effective for all EIDLs approved in 2020, 2021 and 2022. Before this announcement, the deferment allowance was 24 months from the original loan's closing date.
Restaurants should be aware that:
As you have likely heard, Congress this week finally reached a bipartisan agreement on their annual spending bill. The agreement is silent on replenishing the Restaurant Revitalization Fund (RRF) and no new funds will be directed to complete the mission by funding the 177,000 applications still pending. For Wisconsin, this represents 3,776 establishments who collectively need $715,697,000 to survive. These are losses they endured that were not covered by PPP funds.
The National Restaurant Association called this failure a “gut punch” to our industry and we couldn’t agree more. We left no stone unturned in our efforts to get Congress to fulfill their promise to the restaurant industry. Unfortunately, many leaders in Washington were not willing to commit to replenishment in fear that it would send a message that the US economy is not in recovery. We are waiting for the dust to settle in Washington and to identify if there are other avenues to replenish this sorely-needed program.
This decision from Congress is a huge blow to our efforts and the path forward is very uncertain. Our own data from you show that without these critical dollars, upwards of 40% of our Wisconsin restaurants could close on top of the 10-15% that have already shuttered their doors. Restaurants are going to close as a result of inaction, and thousands of fellow Wisconsinites have answered our call every time we’ve asked you to engage in this fight.
From the start of this pandemic, the Wisconsin Restaurant Association and the National Restaurant Association have pursued an “all-of-the-above” strategy for the industry, diving into every issue at the federal, state, and local level that could help or hurt us. From cocktails-to-go to worker shortages to the recently passed RRF Tax Treatment bill, we have had a seat at the table for every major policy debate underway. That will not change.
You’ll be hearing more from us and the National Restaurant Association on the outlook for RRF, but in the meantime there’s a host of other issues we need to be focused on. We’re not stopping, and hope you won’t either.
Wisconsin Restaurant Association President & CEO
On March 7, 2022 Governor Evers signed into law the Restaurant Revitalization Fund Tax Treatment Bill that was championed by the Wisconsin Restaurant Association.
The law updates Wisconsin tax code treatment of RRF grants to conform with federal tax code, treating these grants as non-taxable income, similar to the provisions passed and signed into law for PPP loans earlier this year.
This is great news for RRF grant recipients. It means they will NOT have to pay taxes on the income AND the expenses paid for with the grants can still be deducted as expenses on tax returns.
RRF grant recipients will save money with this tax exemption (some will save thousands of dollars).
The Wisconsin Restaurant Association would like to thank Governor Evers for signing the bill into law and Representative Robert Wittke and Senator Roger Roth for sponsoring the bill. This law will be a great help to restaurants that received RRF grants.
If you have questions about this RRF tax treatment bill, call 608.270.9950 to talk to a Wisconsin Restaurant Association team member.