Signed into law March 11, the American Rescue Plan Act creates a $25 billion Restaurant Revitalization Grant program to help restaurants negatively impacted by the COVID-19 pandemic. Eligible entities can receive up to $10 million in tax-free grants to cover pandemic-related revenue loss incurred from February 15, 2020, to December 31, 2020.
Entities Eligible for the Restaurant Revitalization Grant
Entities eligible for the grant include:
- Bars and restaurants
- Food trucks, food carts, food stands, taprooms, tasting rooms
- Any licensed premise or facility of a beverage alcohol producer where the public can sample, taste, or purchase products
- Other similar places of business in which patrons or the public aggregate primarily to be served food or drink
Entities ineligible for the Restaurant Revitalization Grant include:
- Local or state government-operated businesses
- Publicly traded companies
- An entity that, as of March 13, 2020, owns or operates (together with any affiliated business) more than 20 locations, regardless of whether those locations do business under the same or multiple names
- An entity that received a grant under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act or has an application pending for one
Use of Grants
Restaurant Revitalization Grant funds can be used to pay for the following expenses:
- Payroll costs
- Rent payments
- Principal and interest payments on a mortgage
- Supplies including cleaning materials and personal protective equipment (PPE)
- Maintenance expenses
- Operational expenses
- Paid sick leave
- Covered supplier costs
- Food and beverage expenses within the eligible entity’s scope of normal business practice before the covered period, which runs from February 15, 2020, through December 31, 2021, or another date as determined by the SBA
- Any other expenses the SBA determines to be essential to maintaining the eligible entity
The total amount of grants an eligible entity and any of its affiliated businesses receive cannot exceed $10 million. Entities with multiple locations cannot exceed $5 million per physical location and cannot exceed 20 locations.
Grants are calculated by subtracting 2020 revenue from 2019 revenue. Restaurant Revitalization Grants must be equal to the pandemic-related revenue loss of the entity. If the grant exceeds that loss, the remaining funds must be returned to the Treasury.
Amounts received from the Restaurant Revitalization Grant are tax-exempt and not included in the recipient’s gross income.
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Author: Megan O’Donnell