The National Restaurant Association commended Senate Finance Committee members for approving a tax extenders package that includes three key provisions for the restaurant industry.
The provisions included in the legislation passed out of committee today include the 15-year depreciation schedule on restaurant-building improvements and new construction, retail improvements, and leasehold improvements; the enhanced charitable deduction for the donation of food inventory; and the Work Opportunity Tax Credit, which is offered to employers who hire employees from groups that historically have a hard time finding employment. All three provisions expired at the end of 2013 and would be extended for 2014 and 2015 under the legislation.
“These are key incentives that help spur economic growth and job creation, as well as charitable giving, in the restaurant industry, America’s second-largest private sector employer,” said Dave Koenig, Vice President, Tax and Profitability, National Restaurant Association. “We thank Chairman Wyden and Senator Hatch for their leadership moving this legislation forward, and encourage swift action by the full Senate and House to pass these expired provisions.”
15-year depreciation schedule on restaurant-building improvements and new construction, retail improvements, and leasehold improvements
The bill extends for two years, through 2015, the temporary 15-year cost recovery period for certain leasehold, restaurant, and retail improvements, and new restaurant buildings, which are placed in service before January 1, 2016. The extension is effective for qualified property placed in service after December 31, 2013. Restaurants experience heavy wear and tear serving 130 million guests a day at nearly one million establishments nationwide. Making the 15-year depreciation provisions permanent provides restaurateurs with the predictability and additional cash flow needed to plan for future investments.
Work Opportunity Tax Credit
This bill extends for two years, through 2015, the provision that allows businesses to claim a work opportunity tax credit equal to 40 percent of the first $6,000 of wages paid to new hires of one of eight targeted groups. These groups include members of families receiving benefits under the Temporary Assistance to Needy Families (TANF) program, qualified veterans (including those who are unemployed, disabled, or receiving TANF), qualified ex-felons, designated community residents, vocational rehabilitation referrals, qualified summer youth employees, qualified food and nutrition recipients, qualified SSI recipients, and long-term family assistance recipients.
Enhanced charitable deduction for contributions of food inventory
The bill extends for two years the provision allowing all businesses to claim an enhanced deduction for the contribution of food inventory. A two year extension of this provision is estimated to cost $292 million over 10 years.
Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 990,000 restaurant and foodservice outlets and a workforce of more than 13.5 million employees. We represent the industry in Washington, D.C., and advocate on its behalf. We operate the industry's largest trade show (NRA Show May 17-20, 2014, in Chicago); leading food safety training and certification program (ServSafe); unique career-building high school program (the NRAEF's ProStart); as well as the Kids LiveWell program promoting healthful kids' menu options.
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