Tax Bill Could Pave the Way for Large-Scale Restaurant Renovations According to This Article Published by Nation’s Restaurant News
“The tax bill passed Wednesday by Congress might not enjoy popular support, but according to tax attorneys specializing in restaurants, many operators stand to gain from it, and they’ll gain even more if they invest in renovations over the next five years.
According to data-based publication Fivethirtyeight, just about a third of voters support the Tax Cuts and Jobs Act and 46 percent oppose it. Numerous small-business associations decry the complexity of the new regime and say it favors large corporations over small ones, especially with the change in corporate taxes from as high as 35 percent to a new flat rate of 21 percent.
‘Some people love it, some people hate it, but that is what it is,’ said Jeff Tubaugh, a Columbus, Ohio-based tax partner of the Chicago accounting and auditing firm BDO USA.
However, he sees several benefits for restaurants under the new tax structure, especially in the short term.
Probably the biggest benefit is the five-year bonus depreciation that can be applied to business purchases, such as kitchen equipment, dining room fixtures, furniture, remodeling materials, and even landscaping and parking lots.
‘Everything except for real property or buildings,’ said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation, of which the National Council of Chain Restaurants is a division.
Normally, tax deductions for large expenses must be amortized over several years, but the new regime allows 100 percent deduction in a single year through 2022. After that it will be phased down by 20 percent per year, so in 2023 only 80 percent can be deducted and 20 percent of the deduction will have to be held over into 2024 until the entire break expires at the end of 2026…”
Read the full article by Bret Thorn on the Nation’s Restaurant News’ site: http://www.nrn.com/news/tax-bill-could-pave-way-large-scale-restaurant-renovations