Restaurant Recovery Update - Unemployment Insurance Rate Freeze and PPP Taxes

April 6, 2021
Massachusetts Restaurant Association
ICYMI: Gov. Baker signs law addressing UI Rate Schedule and PPP Tax Issues
Late last week, Governor Charlie Baker signed a two-year Unemployment Insurance rate freeze, along with a tax benefit for small companies that borrowed money under the federal Paycheck Protection Program.
The unemployment measure is great news for restaurant operators, who will avert a 60 percent increase as a result of a two-year schedule freeze on employer UI rates at Schedule E for both 2021 and 2022. The signed law will also allow the state to bond the remaining deficit in the state Unemployment Trust Fund to pay back more than $2.2 billion in federal advances required to meet the overwhelming demand in COVID-19 benefit claims.
Also, the bill will eliminate the 5 percent state income tax on forgiven Paycheck Protection Plan loans for pass-through businesses – including subchapter s corporations, limited liability corporations and limited liability partnerships – that used the money to keep workers on the payroll during the COVID pandemic.
We thank all of the operators that took time to contact legislators about the importance of these two important issues.
Restaurant Recovery Fund
Many questions have been coming in surrounding the Restaurant Recovery Fund.
The SBA continues to develop and build the infrastructure for the hopefully successful launch of this program.
More information to come this week including: timelines, application process, FAQ’s, etc
While not finalized, it is likely the following form will be required: Form 4506-T Transcript of Tax Return
Request for Transcript of Tax Return:
Massachusetts Department of Revenue – Two Important Changes
Changes in collections of certain taxes
A provision in the FY21 Budget changed the due date for sales and use tax and room occupancy excise returns. Returns previously due 20 days after the close of the tax period will now be due 30 days after the close of the tax period. Payments due with the return will also be due 30 days after the close of the tax period.
This change applies to all tax returns filed for the following tax types:
  • Sales/use tax
  • Sales tax on services
  • Meals tax
  • Room occupancy excise
  • Marijuana retail taxes
Please review this information, including charts, for a detailed look at how the changed due date affects filing and paying sales and use taxes and room occupancy excise.
Changes regarding Advanced Payment Requirement
Who is required to make advance payments?
Taxpayers with over $150,000 in cumulative tax liability in the prior year for the tax types listed above will be required to make advance payments.  
  • The advance payment is due on the 25th of the month for the “tax collected”, generally meaning the tax on gross receipts, from the 1st through the 21st of that same monthly filing period. 
  • No return or voucher is required with the advance payment.
  • The remaining tax for the month will be due with the tax return, 30 days after the close of the filing period.
  • The first advance payment will be due on April 25th and will cover the tax liability for April 1st through April 21st. The April return and final payment for period ending April 30, 2021 will be due on May 30, 2021.
Please review this information, including charts, for a detailed look at how the new advanced payment affects filing and paying sales and use taxes and room occupancy excise.
We will have more information coming about this change and how it will impact the restaurant industry.