"Under the proposal, only "historic" diners and restaurants would qualify-those with at least 25 years of continuous operation that qualify as small businesses under federal law. For restaurants to qualify, they also must be family owned. So a 24-year-old-diner or a historic restaurant owned by a group of friends won't qualify, despite facing the same market pressures the bill is intended to offset."
"Those eateries that make the cut would be exempt from the "diner capital of the world's" sales tax on meals eaten on site and could claim tax credits worth up to 10% of their ingredient costs, with an overall cap of $25,000 per year. It sounds straightforward, but it may end up an administrative quagmire: a narrow registry of establishments, annual application requirements, certificates, documentation, and nonrefundable credits that only matter if a business owes enough tax to use them."
"There is no fiscal estimate for how much sales tax revenue the state would forego or how many businesses could fully use the credits. That matters because the credits are still spending-it just doesn't show up as a neat line item or need to face annual review. They bypass the budget process and aren't debated point by point the way schools and pensions may be. Once enacted, they can run on autopilot."
The proposal would exempt qualifying 'historic' diners and restaurants from on-site meal sales tax and offer tax credits equal to up to 10% of ingredient costs, capped at $25,000 annually. Eligibility requires at least 25 years of continuous operation and small-business status, with restaurants additionally required to be family owned. Establishments that fall short of these narrow criteria would receive no relief despite facing similar market pressures. The program would require a registry, annual applications, certificates, and documentation and would provide nonrefundable credits usable only if a business owes sufficient tax. No fiscal estimate accompanies the proposal, raising concerns about opaque spending and budget bypass.
Read at Bloombergtax
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