Major tax reforms become law
At the end of 2015, Congress passed and the President signed into law tax reforms for our industry:
- Restaurant depreciation: Will permanently allow
restaurant improvements and new construction to be depreciated over 15
years opposed to 39 years. This has been one of PRLA's top federal
priorities for several years and we are pleased to see the change occur.
- Bonus depreciation: Normally, businesses
recover capital investments through annual depreciation deductions.
Bonus depreciation of 50 percent has been renewed through 2017 and
retroactively cover 2015. These depreciations allow businesses to write
them off more quickly.
- Section 179 expensing: Small business expensing
in effect from 2010-2014 have been permanently extended and indexed for
property placed in service during 2015 and forward.
- Work opportunity tax credit: This credit is
extended through 2019 and will promote the hiring of individuals who
quality as a member of a target group and will provide a tax credit to
those businesses that hire these individuals. An employer can qualify
for a tax credit up to 40 percent on the first $6,000 in wages and a 25
percent credit for short-term employees.
- Charitable food donation tax credit: This
deduction is permanently extended. In addition, the deduction is
increased from 10 percent to 15 percent of the taxpayer's AGI.
Federal overtime regulations
The deadline to submit comments regarding the change in federal overtime
regulations has passed and now the Department of Labor (DOL) will
review the hundreds of thousands of comments it received. The primary
focus of comments from the hospitality industry consist of the
- Making no changes to the “duties test”, which is the general
description of responsibilities used to classify which employees are
management and, therefore, exempt from overtime pay.
- The DOL states that bonuses can be considered part of an
employee’s overall pay, but it cannot be larger than 10 percent of an
employee’s weekly salary. We believe all bonuses should be considered
part of the overall wage. The current regulations state that the salary
threshold will be increased to $50,400—our hope is that the threshold
will be a more reasonably and justifiable $35,000.
- Comments have also been submitted to oppose the automatic indexing included in the regulations.
We expect final regulations to be released in the fall of 2016.
The National Restaurant Association has joined other business groups in
asking the Department of Justice to bring SESAC under the same legal
scrutiny as BMI and ASCAP. SESAC is currently not subject to the same
regulations that block abusive practices in collecting royalties from
venues that have music. The coalition, that PRLA supports, is to ensure
fair treatment of both artists and venues.
EMV Liability Shift
As of October 1, the liability for credit card fraud shifted from the
credit card company to the business unless the business has installed
EMV chip-reading technology. If you have a breach and do not have EMV
technology, you will be held responsible.
Affordable Care Act
PRLA is committed to making common sense changes to the Affordable Care
Act, most importantly, changing the definition of full-time from 30 to
40 hours per week.
NRLB ambush elections
PRLA is opposed to the recent regulations and rulings that have been released by NRLB in the past year.