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Committee moves bill to exempt 2021 Restaurant Relief funds from GET after long testimony from owners and DOTAX
Summary
Lawmakers advanced SB 1278 to exempt the 2021 Restaurant Relief payments from the General Excise Tax and set a deadline for amended-return claims following extensive testimony from restaurateurs and DOTAX.
The House Committee on Economic Development and Technology recommended passing Senate Bill 1278, which would exempt Restaurant Relief (RF) funds distributed in 2021 from General Excise Tax (GET) and establish a deadline for taxpayers to file amended returns to claim refunds.
Restaurant owners and representatives described severe losses during pandemic closures and long delays in receiving relief funds. Comer Ford, owner of multiple live-music venues, told the committee his businesses lost sales and some venues closed. “I got $3,100,000 of restaurant relief fund money. I’m expected to pay taxes of $160,000,” he said, describing debt accumulated while closed.
The Department of Taxation told the committee it does not have a ready way to automatically identify which taxpayers paid GET on RF funds and prefers taxpayers file amended returns to claim refunds. DOTAX noted a three-year statute of limitations generally applies to refund claims and requested a statutory deadline (the committee adopted language setting a firm filing deadline tied to a December 31, 2025 cutoff in the amended language) to allow department systems to process claims and reduce fraud risk.
Committee members discussed the cost to the state and the administrative burden of processing late refund claims. The chair and DOTAX agreed recipients of RF funds are publicly identifiable, but DOTAX said the agency cannot determine from its records whether a recipient reported the funds as taxable without taxpayers’ amended returns.
At decision making the committee voted to pass SB 1278 with amendments establishing a notification requirement to RF recipients and a final amended-return deadline; the chair reported the recommendation adopted with Representative Holt excused.
