S 121 TEMPORARY GRT DEDUCTIONS FOR RESTAURANTS

Sen Michael Padilla

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 Senate Bill 121 (SB 121) creates a temporary Gross Receipts Tax deduction for food and beverage establishments that did not receive a grant from the Restaurant Revitalization Fund. A distribution to offset the loss of the GRT deduction proposed by SB 121 will be made to local governments. SB 121 makes an appropriation and declares an emergency. 

 Senate Bill 121 (SB 121) creates a temporary Gross Receipts Tax (GRT) deduction from March 1, 2023 through June 30, 2023, for food and beverage establishments that have not received a grant from the Restaurant Revitalization Fund administered by the federal Small Business Administration from the sale of prepared food or non-packaged beverages that are served, picked up, or delivered to customers for immediate consumption. SB121 provides that any amount passed on to a customer in lieu of a GRT deduction pursuant to this act will not be considered as gross receipts. Documentation of eligibility for the deduction will be required by Taxation and Revenue Department (TRD).

To offset the loss of local option GRT, a hold-harmless distribution to local governments in the amount 1.25% is authorized from the General Fund.

To administer the GRT deduction, $150,000 is appropriated from the GF in Fiscal Years 2023 and 2024 (FY24) to TRD. Remaining funds at the end of FY24 will revert to the GF.

SB 121 declares an emergency and takes effect immediately upon its passage and approval by the governor, provided it is passed by two-thirds vote of each house. If not passed by the required vote the effective date is June 16.