ARHANOW
2021 LEGISLATIVE SESSION A Few ARHA-Supported Bills That Passed: ARHA SPONSORED PETS ON THE PATIO A bill requested by several ARHA members cleared its final hurdle the final day of the session. The bill allows pets (dogs) in outdoor dining areas if they comply with ten provisions. It is permissive and up to the restaurant owner to allow for it. The primary provisions require an entrance to the outdoor that doesn’t require going through the restaurant to get to it and the dog is on a leash or in a pet carrier. It also requires the restaurant to post a “prominent” sign that the outdoor dining area is available for patrons with dogs. The bill becomes law on August 1st.
NO STATE INCOME TAXES ON RELIEF FUNDS Businesses, individuals and nonprofits do not have to pay state income taxes on federal coronavirus relief benefits received in 2020 or 2021, plus Alabama businesses will see reduced taxes, under Act No. 2021-1, which the governor signed on February 12. Eliminating the state income tax on federal relief benefits, including Paycheck Protection Program loans and stimulus checks, was a top priority of the Legislature and the governor. The law codifies an executive action taken by the governor on December 11.
ARHA BACKED REMOVAL OF STATE INCOME TAX ON RESTAURANTS’ FEDERAL RESCUE MONEY In one of its final moves of the 2021 session, the legislature ensured that restaurant owners do not have to pay state income taxes on the newest round of COVID-19 federal relief. This language was tacked on to a bill dealing with a tax credit for storm shelters. A bill was pending that could not pass that clarified the tax code to ensure restaurant grants in the Biden administration’s 1.9 trillion American Rescue Plan did not raise the state income tax liability for owners. Roberts, a Senator from Mountain Brook, said Alabama restaurants are expected to receive about $426 million in grants and if lawmakers didn’t act the businesses would be taxed on that money. HB227 that contained this language was the final vote before the Senate adjourned.
WATERED DOWN VERSION OF BILL DEALING WITH DISPARAGEMENT CONTRACTS The bill dealing with disparagement contracts eeked out of the legislature only after business-friendly amendments were added to the final passed version of the bill.
EMPLOYEE/INDEPENDENT CONTRACTOR RELATIONSHIP DEFINED FOR TAX PURPOSES ARHA members have previously been penalized by following the IRS guidelines for employee/independent contractor relationships to find out that the State of Alabama Dept. of Labor and Revenue held them to a different standard. This year, ARHA pushed to encourage the legislators to correct that practice. The bill became law on July 1, 2021. It gives a safe harbor for those who follow the Federal guidelines when determining whether a worker is an employee for purposes of benefits and tax liabilities.
HISTORIC REHABILITATION TAX CREDIT The tax credit boosts potential for the restaurant, lodging and tourism industry to garner opportunities from the revitalization of many historic sites throughout the state and particularly in the metropolitan areas. The program allows the developer or owner of a property that is at least 60 years old to be eligible for a state tax credit of 25% of qualified rehabilitation expenses. The state credits can be in addition to a 20% federal historic tax credit offered to income-produce programs. The state incentive began in 2013, and has fueled investment in revitalizing older and abandoned structures mostly in larger cities like Birmingham and Mobile. Iconic buildings like the Lyric Theater, The Admiral Hotel and the Pizitz Food Hall have been renovated within the past decade thanks, in part, to the support from the tax credit.
BUSINESS CONTINUITY PROTECTION HB 103 – By Representative Kiel- This law provides that, during a state of emergency involving a pandemic, epidemic, bioterrorism event, or the appearance of a novel or previously controlled or eradicated infectious disease or biological toxin, any business, church, mosque, synagogue, or other bona fide religious institution may continue or resume those business or religious operations if the business or religious entity complies with any applicable emergency order, rule, or regulation issued by the Governor, a state department or agency, or governing body which authorizes other business entities to operate under certain safety precautions.
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