On April 17, 2021 the SBA published two very important pieces of information for potential applicants to the Restaurant Revitalization Fund – a sample application and a program guide.
Confirming many of our prior thoughts, the SBA guidance provides more certainty on what is necessary for the application.
A few observations about the released guidance:
The Program Guide and sample application confirm the comments that the following businesses will need to demonstrate that onsite sales to the public comprise at least 33% of gross receipts.
- Bakeries
- Breweries and/or microbreweries
- Wineries
- Distilleries
Applicants should also be prepared with ownership information and affiliate information. The sample application requires disclosure of all owners with 20% or more of the equity of the Applicant. Importantly, if no owner has at least 20% ownership of the Applicant, enough owners must be listed to get to an at least 20% combined equity ownership of the Applicant.
Applicants should also gather information about any PPP loans received during 2020 and/or 2021. The sample applications requires the Applicant to provide both the amount received and the PPP loan number.
Helpfully, the sample application provides tables to assist in calculating gross receipts of the Applicant. For many applicants, gross receipts will come from the 2019 and 2020 income tax returns. As we provided previously, gross receipts are not to include amounts received from any PPP loan, SBA 7(a) debt relief payments, EIDL loan, EIDL advance, targeted EIDL advance or state and local small business grants. Applicants may wish to consult with their tax advisor on gross receipts.
Applicants that started operations between Jan. 1, 2020 and March 10, 2021 or applicants that have not yet opened, but have incurred eligible expenses calculate grant amounts using the amount spent on eligible expenses, which are the same expenses that are qualified uses of this grant money.
The Program Guide contains many helpful definitions for applicants, including the definition of gross receipts. In what should be simplification, the Program Guide cross-references the line items on the tax returns to report as the gross receipts (generally the gross receipts net of allowances number).
Also contained within the Program Guidance are three ways for applicants to apply. Through a recognized SBA Restaurant Partner (list to be released), through SBA directly at restaurants.sba.gov, and telephonically at (844) 279-8898.
We anticipate at least one additional update to the program guide before the program is live. Potential applicants, though, should utilize these SBA resources to prepare to apply.
This article was written by Mathew Talcoff, John Nicolopoulos, Tracy Burr, Ryan Corcoran and originally appeared on 2021-04-18.
2022 RSM US LLP. All rights reserved.
https://rsmus.com/insights/tax-alerts/2021/sba-releases-draft-application-and-program-guide-for-restaurant.html
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
At Keegan Linscott & Associates, our people are our greatest asset. We embody a commitment to our people in our culture of openness, cooperation, teamwork and community service. Keegan Linscott provides exceptional training, coaching, a positive work/life balance and opportunities for personal and professional development. Keegan Linscott’s dedicated team of multi-faceted professionals stand ready to provide the highest quality of audit, tax and consulting services to our valued clients and community. We are leaders in our practice areas and are uniquely qualified to provide innovative and practical solutions.
As a group of practitioners working together, the professionals at Keegan Linscott are able to specialize in specific areas of accounting, audit, taxation, and consulting – a key advantage which allows us to offer a higher standard of service quality.
For more information on how Keegan Linscott & Associates, PC can assist you, please call (520) 884-0176.
