​Congressional tax writers are considering a number of tax increases in the $3.5 trillion budget reconciliation bill that is being negotiated among Congressional Democrats this week. The National Restaurant Association and the Wisconsin Restaurant Association have been working with moderate members of Congress who will play a critical role in passing the bill, to educate them on the detrimental impact tax increases would have on the restaurant industry still struggling to recover from the pandemic. In a letter to House and Senate  leaders, the National Restaurant Association opposed:
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• Elimination of the small business tax deduction for qualified business income (QBI) after $500,000.
• Repeal of the stepped-up basis, which would make death a taxable event for family-owned businesses. Restaurants carry an average cash-on-hand to cover 16 days of expenses. Taxing a restaurant as it is passed down to the next generation would require cash that simply cannot be produced in the short-term.
• Increases in the corporate tax rate, which will cost companies - including restaurants - over

$540 billion. As the second-largest private sector employer in the nation, restaurants will have fewer opportunities to invest in employee growth and expansion.

If passed, most of the proposed changes will take effect in January 2022. “Raising taxes during a pandemic creates unintended consequences for a restaurant’s prospects for survival, the growth of our workforce, and the recovery of the communities we serve,” said Kristine Hillmer, WRA President and CEO. “It would be tragic if Congress provided a lifeboat for restaurants and other small businesses via the Paycheck Protection Program, Employee Retention Tax Credit, and the Restaurant Revitalization Fund, only to sink these same businesses with a major tax hike while a full recovery remains out of sight.”

Recently, the US Small Business Administration (SBA) announced new flexibilities and enhancements for the COVID-19 Economic Injury Disaster Loans (EIDL) program. The COVID-19 EIDL program provides 30-year loans with fixed interest rates of 3.75% for eligible businesses.

The National Restaurant Association has been working with the SBA to make improvements to EIDL.
These improvements include:

• Larger loan amounts, from $500,000 to $2 million
• More flexibility with EIDL funds, including the ability to pay off private commercial loans or credit card debt with EIDL funds
• Updated affiliation standards

​The National Restaurant Association is hosting a webinar with the SBA on the EIDL enhancements on September 15th at 1:00 pm (CT).