The third piece of Taffer’s plan is to include a domestic travel incentive to boost the tourism industry. During the summer, the American Tax Rebate and Incentive Program Act, or the American TRIP Act, was introduced. The bill would give a yearly tax credit of $8,000 for joint filers and $4,000 for individual filers and an additional $500 for dependents for the 2020, 2021, and 2022 tax years. The legislation—which didn’t gain traction—was introduced by former Sen. Martha McSally, who lost her seat to Sen. Mark Kelly in the November election.
“Consumer incentives for domestic travel would be really important for places like Las Vegas, Miami, New York, Los Angeles that have heavy tourism industry that feed the restaurant industry so much,” Taffer says.
The final part, which Taffer says he’s most excited about, is the potential re-implementation of the meal expense tax reduction. The law in question is the Tax Cuts and Jobs Act, which was passed in 2017. According to guidance from the IRS, the law prohibits a deduction for any item related to entertainment, amusement, or recreation. Companies are allowed to deduct 50 percent of food and beverage expenses “associated with operating their trade or business, including meals consumed by employees on work travel.”
Trump, along with some Republican lawmakers, have suggested the food and beverage deduction move up to 100 percent. Taffer says the change would be vital for lunch and business oriented restaurants. At the beginning of December, Senate Majority Leader Mitch McConnell circulated a slimmer bill that would include the proposed rise in deduction, also known as the “three martini deduction.”
“If those four things happen, The expanded PPP with debt, the expanded employee retention tax, the domestic travel incentive, and a reinstatement of the employee meal deduction, that would dig us out and set us up for revenue going forward,” Taffer says. “So I really think those four things are critical.”
Overall, talks between Democrats and Republicans over a potential stimulus don’t appear too optimistic. As CNN reported, House Speaker Nancy Pelosi and McConnell are “bitterly trading blame as the leadership remains at sharp odds about what can even pass, meaning there's no guarantee any deal reached by a bipartisan group of lawmakers will even get through Congress.”
The tense negotiations leave Taffer, restaurant operators, and the rest of the country waiting for a much-needed resolution.