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Yesterday at a hearing before the U.S. House of Representatives Committee on Small Business, National Restaurant Association Director of Tax and Profitability Dave Koenig testified about the importance of several tax provisions to the restaurant industry and to the growth of small businesses.
In his testimony, Koenig encouraged Congress to make permanent certain expiring tax provisions, including the 15-year depreciation schedules for leasehold improvements, restaurant improvements, and new construction and retail improvements, as well as the charitable deduction for the donation of food inventory. Additionally, Koenig asked that Congress increase the business meal deduction from its current level of 50 percent to 80 percent.
"I appreciate the opportunity to come before this Committee and advocate for several tax initiatives that are critically important to the restaurant industry – an industry comprised of mostly small businesses," Koenig says. "There are several expiring tax provisions that the restaurant industry needs to have extended and made permanent so that restaurant operators can continue to grow their businesses and create jobs."
The Association supports the retroactive extension through the end of 2010 of the 15-year depreciation schedule for leasehold improvements, restaurant improvements and new construction, and retail improvements. The Association also supports bipartisan legislation, H.R. 4306, introduced in December 2009 by Representatives Kendrick Meek (D-Florida) and Pat Tiberi (D-Ohio) that would make the 15-year depreciation schedule permanent.
The charitable deduction for food donation to charitable organizations helps offset the costs associated with storage and transportation. Without the provision, taxpayers get the same tax treatment for throwing out surplus food as they do for giving it to a charitable organization.
The Association also supports the Good Samaritan Hunger Relief Tax Incentive Extension Act, H.R. 3227, sponsored by Reps. Sander Levin (D-Michigan) and Geoff Davis (R-Kentucky), which would expand and make permanent this tax extender provision for small businesses to donate food inventory to charity. The Senate companion bill, S. 1212, is sponsored by Senators Lincoln (D-Arkansas), Lugar (R-Indiana), and Leahy (D-Vermont).
Lastly, increasing the business meal and entertainment deduction from 50 percent to 80 percent is a key provision for small businesses. Representative Shelley Berkley (D-Nevada) is the lead sponsor of H.R. 3333, a bipartisan bill that would increase the business meal and entertainment deduction to 80 percent for all business meal users. Companion legislation, S. 2905, has also been introduced in the Senate by Senator Inouye (D-Hawaii).