Foodservice Equipment Reports

Foodservice Industry Awaits New Congress For More Permanent Tax Relief And Legislation

The year ended as it had progressed in Congress: Little was accomplished and little that was done was left certain. Before the 113th Congress left town for the holidays, it managed to pass a bill to renew four tax provisions directly impacting restaurant operations—but the renewal is only a temporary fix. The provisions—commonly known as “tax extenders”—were renewed only for 2014 and expired at year’s end. Historically, Congress has easily renewed tax extenders with little fanfare, but dysfunction and gridlock over the past two years put renewal on the back burner until the final days of business for both houses of Congress.

The National Restaurant Association was among those left wondering about more permanent solutions. “While we are relieved by the Senate’s action and Congress’ decision to retroactively renew these key tax extenders and appreciate the members of Congress who secured this outcome, a return to the uncertainty surrounding taxes that has persisted over the past year is unfortunately only weeks away,” said Scott DeFife, the association’s executive v.p.-policy and government affairs. “This uncertainty is causing restaurateurs across the country to postpone decisions that would help them expand their business and create jobs.”

Included in the bill were four of the NRA’s tax priorities: 

  • 15-year depreciation schedule: This allows restaurant operators to depreciate the cost of certain renovations, improvements and new construction over 15 years. If the bill had not passed, any projects launched in 2014 would have been depreciated over 39.5 years.   
  • Work Opportunity Tax Credit: Businesses will be able to claim tax credits of $2,400-$5,600 for hiring employees from demographic groups who historically have a hard time finding employment.
  • Enhanced charitable food donation: All restaurants can utilize this deduction to help offset some of the costs of storing and transporting food they’re donating to charity. 
  • Section 179 expensing: Restaurants and other businesses can qualify for up to $500,000 in new deductions if they financed less than $2 million worth of new or used business equipment, software and qualified real property in 2014. Without the renewal, the deduction would have been capped at $25,000.

Legislation to permanently extend these provisions is among the NRA’s top advocacy priorities for 2015.

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