The Texas Restaurant Association is working to adjust regulations according to CDC requirements during the pandemic. A lot of moving parts go into addressing payroll, rent, utilities and fees for example. Here is a breakdown of the latest from the Texas Restaurant Association.
A Second Round of PPP loans for distressed sectors, such as hospitality, restaurants, travel, and tourism. In a Senate Small Business Committee hearing yesterday, Secretary Mnuchin said another economic stimulus will likely be needed and it should target those industries that are undergoing the most challenges. We’ve lost 3X the number of jobs as any other sector, we continue to struggle with capacity restrictions and lackluster demand for dine-in, and costs are piling up to operate in the COVID-19 era. I feel strongly that we need to jump on this and push hard now that we have the PPP Flexibility Act passed. More to come on this, but we are going to lean in here – and strongly! Think of this as a targeted recovery fund for our sector!
Tax Deductibility of forgiven PPP loan expenses on payroll, rent, mortgage interest, and utilities. The IRS said these expenses, when paid with forgiven PPP loan funds, are not tax deductible. This would leave small businesses with a massive tax liability at a time when liquidity is already extremely challenged. The IRS notice (2020-32) also runs counter to congressional intent behind the CARES Act. Senator Cornyn is sponsoring bipartisan legislation to fix this issue – S. 3612. I know as you are reading this you are thinking “you must be kidding me.” I wish! This is why we need to get this bill passed as well. More to come, and we will have a chat with Cornyn’s team tomorrow to get an update on the bills progress.
MB Permit Fees: As I begin to get out across the state and see our dining rooms firsthand, I am further convinced that we need targeted financial support from Texas to support our long and painful recovery. Today we reiterated our request to Governor Abbott for a waiver to allow TABC to accept payment plans from restaurants and bars that have been negatively impacted by COVID-19 and need to renew their alcohol license this year. We aren’t asking for a fee waiver, just more time for our restaurants and bars to get back on their feet.
Alcohol To-Go. We also reminded Governor Abbott’s team of our ongoing request to expand the existing alcohol to-go waiver for the duration of the recovery. This is an easy win that would be very helpful to restaurants now. We’re hearing from more and more stakeholders in the alcohol industry who agree it could help everyone, regardless of their place in the three-tiered system. We continue to advocate for the waiver to remain in place for the duration of the recovery and that it be expanded to include:
- Alcoholic beverages that are mixed by a restaurant or other TABC-licensed business, sealed, and transported so they are not easily accessible to the vehicle driver;
- Growlers of beer that are filled and capped by a restaurant or brewery; and
- Distilled spirits in manufacturer-sealed containers that are 750 mL or less. The current limit is 375 mL or less, but the vast majority of spirits are bottled in 750 mL containers.
Capacity and Phase 4: We are working on Phase 4 recommendations, and I thank so many of you for sending in your ideas, photos, and for talking directly with me. This is a careful balance, but I believe we have the right asks and plan to submit the proposal by the end of the weekend. We know you need more tables so we are working hard to help get that done.
Retro-fit Restaurants: The reality is most of you are having to make changes to your restaurants to accommodate more to-go, delivery or other opportunities to bring in more revenue. This costs money, along with the cost of sanitization, cleaning and PPE. We are asking Governor Abbott for $390M so we can provide grants to help cover costs like this. We have to get louder here and message why this matters. Please send this link to your friends and post all over social media. I know we need this relief but with so many asking for support, we need to be the loudest industry.
In closing, today was an interesting day for me. I jumped from calls about federal relief, discussing partition heights, had numerous calls with members who are truly hurting, spoke with Good Day Dallas on how we protect our guests and employees, and defended our sector from media who want to highlight every restaurant that has a positive COVID-19 case to drive clicks and engagement for their own financial gain. This behavior is beyond unfair and, worse than that, it hurts an industry already brought to its knees and owners and employees who are going above and beyond to keep their guests and each other safe. There is so much pain and fear and to have individuals and companies exploiting that gives me pause to consider if we are all really in this together.
I can promise you – we have your back, we will continue to go strong at those who want take advantage of this crisis, and we will continue to shed light on how hard this is and how many real lives are at stake if we don’t make a turn and begin to rebuild our businesses. You are all incredibly special, and I continue to be humbled by your resiliency and heart.