Restaurant Recovery Update 2-17-2021

By Massachusetts Restaurant Association February 17, 2021
Massachusetts Legislative Alert - Tax Liability on business expenses paid with PPP funds
  • Massachusetts needs to pass legislation that will ensure business expenses paid with Paycheck Protection Program (PPP) loans are tax deductible. 
  • When Congress created the PPP in March 2020, they made clear to small businesses that forgiven PPP expenses would be tax deductible. Restaurants used PPP to keep employees on payroll — even while the restaurant was closed or operating at limited capacity. While Congress has addressed this issue for federal purposes, Massachusetts has not. 
  • PPP expenses were critical for the overwhelmed State unemployment system, which was already swamped due to COVID-19, and allowed more employees to remain connected to their employers.
  • Massachusetts is considering a “claw back” of PPP expenses, by denying standard business deductions, which will increase tax liability on struggling businesses and ignoring the federal revenue code (as adjusted by Congress in December 2020).
  • This tax claw back takes place while Massachusetts restaurants continue to struggle. Creating the very real situation that an operator will pay higher taxes for a time frame that they were not able to operate. 
Contact your legislator and ask them to co-sponsor SD 172 An Act providing financial relief to small businesses during the COVID-19 pandemic
Find your Massachusetts Legislator

From our Friend & Board Member Jim Rudolph, Rudolph Friedmann LLP
By Edward DelSignore
MA Court Rules Tenant Does Not Owe Rent During COVID-19 Related Government Shutdown

UMNV 205-207 Newbury, LLC (referred to as “UMNV”) leased its Newbury Street location to Caffe Nero Americas, Inc. (referred to as “Caffé Nero”) for a 15-year term starting June 1, 2017. The lease stipulated that Caffé Nero was to use the leased premises “solely for the operation of a Caffé Nero themed café under Tenant’s Trade Name and for no other purpose,” and further that Caffé Nero was required to operate the café “in a manner consistent with other Caffé Nero locations in the Greater Boston area,” to serve food and beverages of “first class quality,” and could only offer take-out sales “from its regular sit-down restaurant menu.”
In late March 2020, due to COVID-19-related government executive orders, Caffé Nero was forced to cease serving customers inside of its location. As a result, Caffé Nero requested, and was denied, the opportunity to suspend its rent obligations under the lease. UMNV informed Caffé Nero that if rent was not paid it would be in breach of the lease agreement, and UNMV would began eviction proceedings. Before vacating the premises, Caffé Nero did not pay rent from April 2020 through October 2020.

Santander Cultivate Small Business Education FREE Program
Santander Bank’s Cultivate Small Business program is designed to give early-stage entrepreneurs the opportunity for an incredible 16 week (fully virtual) completely free program that provides industry specific education, networks, and mentoring, along with the opportunity to apply for capital grants for your business. The program is sponsored by Santander Banks Cultivate Small Business Program and is targeted to help early-stage entrepreneurs that are woman, people of color and immigrants working to build and sustain food-related businesses in emergent neighborhoods in Massachusetts. 
Applicant Criteria
Program participants should represent a business that meets the following criteria:
  • Participants should reside in or represent a business located in a low-to moderate-income urban area in Massachusetts or New Jersey.
  • Gross/Net revenues of $25,000 to $1,000,000 in the most recent full calendar year.
  • Minimum of 1 year in operation as of January 1, 2021.
  • Between 1 and 10 full-time-equivalent employees.
  • Food-related industries, including processing, technology, manufacturing, and food services.
NOTE: Applicants do not need to meet all criteria in order to be considered for acceptance.

To learn more and apply for this opportunity click the link here
***Applications are due no later than March 1, 2021***

​Profits of "Wicked Hungry" T-Shirt Purchases to Help Support Massachusetts Restaurants in Need

All Profits from every shirt purchased will be donated to The Massachusetts Restaurant Association to help local restaurants, bars & cafes impacted by the Covid-19 pandemic.
T-shirts are available until February 28th - spread the word!
Learn more and purchase a shirt here.