Advocacy & Representation

As Congress begins to debate whether to extend a payroll-tax cut for American employees beyond Feb. 29, the National Restaurant Association is encouraging Congress to act swiftly to extend two other tax provisions important to restaurants: a 15-year restaurant depreciation schedule and the Work Opportunity Tax Credit.

Congress let both tax provisions expire at the end of 2011. The NRA has mounted a widescale campaign to tell Congress why it's so important to provide tax certainty to restaurateurs, in order to spur businesses to put money back into their operations and create more jobs. The NRA submitted testimony on this issue to the Senate Finance Committee last week and this week sends a letter to every member of Congress to encourage immediate action on the WOTC and depreciation, asking lawmakers to extend the benefits retroactively to Jan. 1.

The Work Opportunity Tax Credit is available to employers when they hire certain individuals in groups that often face barriers to employment, to offset the cost of hiring and training. The depreciation provision allows restaurateurs to depreciate the cost of building improvements and new construction over 15 years, rather than 39.5 years.

Employers in states that borrowed from the federal government to pay for jobless benefits and that haven't yet repaid the funds will feel it in their wallets as they file their tax returns for 2011.

Employers pay a 6 percent federal unemployment tax (FUTA) on employee wages up to $7,000. Typically, employers each year are able to offset the 6 percent federal tax with a 5.4 percent credit for state unemployment taxes paid.

However, employers who operate in states that still owe the federal government money for unemployment benefits will not be able to take the full 5.4 percent credit for 2011.

The IRS released a bulletin last month listing the 21 "credit reduction" states. Employers in most of these states will be limited to a 5.1 percent credit against FUTA taxes for 2011. The information is also available on the IRS's recently released 2011 Form 940, Employer's Annual FUTA Tax Return.

The California Restaurant Association, representing 22,000 restaurants across the state, applauded the Los Angeles County Board of Supervisors last week for its approval of the Los Angeles County Healthy Design Ordinance that promotes exercise and increased access to fresh foods.

The organization also cautioned policymakers to avoid punitive and impractical policies that would create excessive zoning regulations on Los Angeles restaurants.

The NRA is ramping up its requests for Congress to extend two tax provisions important to restaurant operators: the Work Opportunity Tax Credit and a 15-year depreciation schedule for restaurant spending on new construction and building improvements.

In a nod to its importance on the U.S. economy and relationship to the restaurant industry, President Obama, at an appearance last week at Walt Disney World in Orlando, Fla., pledged his full support for the U.S. tourism and travel industry. He also named former National Restaurant Association chairman Michael C. Gibbons as one of the U.S. Travel and Tourism Advisory Board's 32 new members.

Gibbons, president and CEO of Ann Arbor, Mich.-based Mainstreet Ventures, which owns and operates fine-dining restaurants in five states, will help advise the Secretary of Commerce on government policies and programs that affect U.S. travel and tourism and provide counsel on current and emerging issues affecting that industry. One important area of focus will be working to increase hotel-room occupancies here in the United States, which ultimately will lead to job creation, he said.

"Filling hotel rooms ... helps the entire tourism and hospitality industry," Gibbons stated. "When hotels are busy, they hire staff; same with restaurants, theaters, retailers, etc. Job growth will help the economy and reduce the government's debt through increased revenue."

The U.S. Supreme Court this week refused to consider an appeal by Applebee's in a class-action case filed by more than 5,000 servers and bartenders over the company's tip-credit practices.

The National Restaurant Association, which had filed a brief supporting Applebee's petition to the Supreme Court to take the case, believes the court's refusal to hear the case will increase confusion over an impractical and bureaucratic Department of Labor interpretation of federal tip-credit law.

The servers and bartenders who filed the 2006 case allege that they spent more than 20 percent of their time performing work that didn't directly produce tips, such as cleaning tables and general prep work, and should have been paid the full minimum wage rate for that time.

The Supreme Court's refusal to take the case sends Applebee's International Inc. v. Gerald A. Fast, et al., back to a lower court to rule on the case's merits, including whether the Applebee's employees who filed the case spent more than 20 percent of their time on non-tip-producing duties.

U.S. Small Business Administration chief Karen Mills will now be included in President Barack Obama's Cabinet meetings.

The President announced Jan. 13 that he is "elevating the Small Business Administration to a Cabinet-level agency." The designation doesn't necessarily mean additional funding or staff for the SBA. The President said he eventually would like to roll SBA, the Commerce Department and a few other trade-related groups into a yet-to-be-named new agency. This consolidation will require Congress's approval.

The National Restaurant Association will hold its 26th annual Public Affairs Conference April 17 to 18 in Washington, D.C., to deliver a message to Congress: America Works Here.

Restaurateurs beleaguered by New York City's controversial letter-grade health-inspection system could see some relief soon, thanks to the City Council's decision to survey operators on the mandate's impact on business, the New York State Restaurant Association said.

The decision to survey restaurant operators was made Jan. 5 by City Council Speaker Christine Quinn, following more than a year of work by the New York State Restaurant Association to have their members' voices heard on how difficult and confusing the letter grade standards are to achieve and the amount of money they spend to defend their businesses when they don't receive an "A" grade upon first inspection.

The survey, which asks restaurant operators about their experiences with the health department's inspections, is available online and must be completed by New York restaurateurs by Jan. 31, said Andrew Rigie, executive vice president of NYSRA's New York City division. He added that the findings of the survey would be addressed at an oversight hearing in February.

Consistent with the National Restaurant Association's strong concern about the impact of the health care law on the restaurant industry -- particularly the employer mandate that takes effect in 2014 -- the Association Jan. 6 submitted an amicus brief to the Supreme Court asking judges not to let related provisions of the law proceed if justices rule that the law's "individual mandate" is unconstitutional.