Restaurant Revitalization Tax Credit Act
Bill: S.5219 | Sponsor: Sen. Cardin, Benjamin L. (D-MD)
Policy area: Taxation

Summary:
Restaurant Revitalization Tax Credit Act
This bill allows certain restaurants affected by the COVID-19 pandemic a credit against payroll tax liability up to 100% of the wages paid to their employees, not to exceed $25,000 in any calendar quarter.

To amend the Internal Revenue Code of 1986 to provide a partially 
    refundable credit against payroll taxes for certain restaurants 
                   affected by the COVID-19 pandemic.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Restaurant Revitalization Tax Credit 
Act''.

SEC. 2. RESTAURANT REVITALIZATION CREDIT.

    (a) In General.--Subchapter D of chapter 21 of subtitle C of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 3135. RESTAURANT REVITALIZATION CREDIT.

    ``(a) In General.--In the case of an eligible employer, there shall 
be allowed as a credit against applicable employment taxes for each 
calendar quarter an amount equal to 100 percent of the wages with 
respect to each employee of such employer for such calendar quarter.
    ``(b) Limitations and Refundability.--
            ``(1) In general.--The aggregate amount of wages which may 
        be taken into account under subsection (a) by the eligible 
        employer for any calendar quarter shall not exceed $25,000.
            ``(2) Credit limited to employment taxes.--The credit 
        allowed by subsection (a) with respect to any calendar quarter 
        shall not exceed the applicable employment taxes (reduced by 
        any credits allowed under subsections (e) and (f) of section 
        3111) on the wages paid with respect to the employment of all 
        the employees of the eligible employer for such calendar 
        quarter. For purposes of the preceding sentence, the credit 
        allowed under subsection (a) shall be applied first against 
        applicable employment taxes described in subsection (c)(1)(A).
            ``(3) Partial refundability of excess credit.--
                    ``(A) In general.--If the amount of the credit 
                under subsection (a) exceeds the limitation of 
                paragraph (2), so much of such excess as does not 
                exceed the applicable employer refund limitation shall 
                be treated as an overpayment that shall be refunded 
                under sections 6402(a) and 6413(b).
                    ``(B) Applicable employer refund limitation.--For 
                purposes of subparagraph (A), the applicable employer 
                refund limitation is the excess of--
                            ``(i) $25,000, over
                            ``(ii) the amount of credit treated as an 
                        overpayment of the eligible employer by reason 
                        of this paragraph for all preceding calendar 
                        quarters.
                    ``(C) Reduction based on number of employees.--In 
                the case of any eligible employer for which the average 
                number of full-time employees (within the meaning of 
                section 4980H) employed by such eligible employer 
                during the last calendar quarter of 2022 (rounded to 
                the nearest multiple of 1) exceeds 10, the $25,000 
                dollar amount under subparagraph (A)(ii)(I) shall be 
                reduced (but not below zero) by the product of such 
                excess and $2,500.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Applicable employment taxes.--The term `applicable 
        employment taxes' means the following:
                    ``(A) The taxes imposed under section 3111(a).
                    ``(B) The taxes imposed under section 3111(b).
            ``(2) Eligible employer.--
                    ``(A) In general.--The term `eligible employer' 
                means any employer--
                            ``(i) which is an eligible entity (as 
                        defined in section 5003(a) of the American 
                        Rescue Plan Act of 2021) which--
                                    ``(I) was established before March 
                                14, 2020,
                                    ``(II) submitted an application for 
                                a grant under section 5003(c) of such 
                                Act in accordance with the procedures 
                                established by the Administrator of the 
                                Small Business Administration under 
                                such section,
                                    ``(III) certifies to the Secretary 
                                (in such form and manner as the 
                                Secretary requires) that such employer 
                                was eligible for a grant under such 
                                section, and
                                    ``(IV) did not receive any grant 
                                funds under such section due to a lack 
                                of funding,
                            ``(ii) which paid applicable employment 
                        taxes with respect to pay periods occurring in 
                        at least 2 calendar quarters of calendar year 
                        2021, and
                            ``(iii) which meets the gross receipts test 
                        of subparagraph (B).
                    ``(B) Gross receipts test.--An employer meets the 
                gross receipts test of this subparagraph if--
                            ``(i) the gross receipts of such employer 
                        for any applicable calendar year were less than 
                        50 percent the gross receipts of such employer 
                        for calendar year 2019, or
                            ``(ii) the average gross receipts of such 
                        employer for all applicable calendar years were 
                        less than 70 percent the gross receipts of such 
                        employer for the calendar year 2019.
                    ``(C) Applicable calendar year.--For purposes of 
                this paragraph, the term `applicable calendar year' 
                means any of the following:
                            ``(i) Calendar year 2020.
                            ``(ii) Calendar year 2021.
                    ``(D) Special rule for employers not in existence 
                for entirety of 2019.--In the case of any employer that 
                was in existence before January 1, 2020, but not in 
                existence on January 1, 2019, the amount of gross 
                receipts taken into account for any applicable calendar 
                year shall be the amount of such gross receipts 
                (determined without regard to this clause) multiplied 
                by the ratio of--
                            ``(i) the number of days during 2019 during 
                        which such employer was in existence, to
                            ``(ii) 365.
                    ``(E) Special rule for employers not in existence 
                before 2020.--In the case of any employer that was not 
                in existence before January 1, 2020, in applying this 
                paragraph--
                            ``(i) the amount of gross receipts for 
                        calendar year 2019 shall be equal to the 
                        product of--
                                    ``(I) the amount of gross receipts 
                                for the period beginning on the date 
                                the employer was established and ending 
                                before March 14, 2020, and
                                    ``(II) the ratio of 366 to the 
                                number of days in the period described 
                                in subclause (I), and
                            ``(ii) the amount of gross receipts for 
                        calendar year 2020 shall be equal to the 
                        product of--
                                    ``(I) the amount of gross receipts 
                                for the period beginning after March 
                                13, 2020, and ending on December 31, 
                                2020, and
                                    ``(II) the ratio of 366 to the 
                                number of days in the period described 
                                in subclause (I).
            ``(3) Wages.--
                    ``(A) In general.--The term `wages' has the meaning 
                given such term under section 3121(a), determined 
                without regard to paragraph (1) thereof.
                    ``(B) Exception.--Such term shall not include any 
                wages taken into account under sections 41, 45A, 45P, 
                45S, 51, and 1396.
            ``(4) Other terms.--Any term used in this section which is 
        also used in this chapter shall have the same meaning as when 
        used in this chapter.
    ``(d) Aggregation Rule.--All persons treated as a single employer 
under subsection (a) or (b) of section 52, or subsection (m) or (o) of 
section 414, shall be treated as one employer for purposes of this 
section.
    ``(e) Election To Not Take Certain Wages Into Account.--This 
section shall not apply to so much of the wages paid by an eligible 
employer as such employer elects (at such time and in such manner as 
the Secretary may prescribe) to not take into account for purposes of 
this section.
    ``(f) Third Party Payors.--Any credit allowed under this section 
shall be treated as a credit described in section 3511(d)(2).
    ``(g) Treatment of Deposits.--The Secretary shall waive any penalty 
under section 6656 for any failure to make a deposit of any applicable 
employment taxes if the Secretary determines that such failure was due 
to the reasonable anticipation of the credit allowed under this 
section.
    ``(h) Extension of Limitation on Assessment.--Notwithstanding 
section 6501, the limitation on the time period for the assessment of 
any amount attributable to a credit claimed under this section shall 
not expire before the date that is 5 years after the later of--
            ``(1) the date on which the original return which includes 
        the calendar quarter with respect to which such credit is 
        determined is filed, or
            ``(2) the date on which such return is treated as filed 
        under section 6501(b)(2).
    ``(i) Regulations and Guidance.--The Secretary shall issue such 
forms, instructions, regulations, and other guidance as are necessary--
            ``(1) with respect to the application of the credit under 
        subsection (a) to third party payors (including professional 
        employer organizations, certified professional employer 
        organizations, or agents under section 3504), including 
        regulations or guidance allowing such payors to submit 
        documentation necessary to substantiate the eligible employer 
        status of employers that use such payors, and
            ``(2) to prevent the avoidance of the purposes of the 
        limitations under this section, including through the leaseback 
        of employees.
Any forms, instructions, regulations, or other guidance described in 
paragraph (1) shall require the customer to be responsible for the 
accounting of the credit and for any liability for improperly claimed 
credits and shall require the certified professional employer 
organization or other third party payor to accurately report such tax 
credits based on the information provided by the customer.
    ``(j) Application.--This section shall only apply to wages paid 
after December 31, 2022, and before January 1, 2024.''.
    (b) Refunds.--Paragraph (2) of section 1324(b) of title 31, United 
States Code, is amended by inserting ``3135,'' after ``3134''.
    (c) Clerical Amendment.--The table of sections for subchapter D of 
chapter 21 of subtitle C of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``Sec. 3135. Restaurant revitalization credit.''.
    (d) Coordination With Small Business Administration.--The 
Administrator of the Small Business Administration shall coordinate 
with and provide information to the Secretary of the Treasury (or the 
Secretary's delegate) to assist in identifying employers that are 
eligible for the credit allowed by section 3135 of the Internal Revenue 
Code of 1986, as added by this section.
    (e) Effective Date.--The amendments made by this section shall 
apply to calendar quarters beginning after December 31, 2022.
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