June 3, 2020, Des Moines, IA—The Iowa Restaurant Association today announced that they are seeking relief from the state legislature in the form of tax and fee forgiveness for many of Iowa’s 6,000+ hospitality establishments, as well as other small businesses. The Association sent a proposal to key lawmakers seeking graduated levels of assistance based on the economic impact of mandated closures and is asking the Legislature to make it part of the budget package that they are working on to wrap up this year’s legislative session. Iowa’s restaurant industry lost more than $310 million in April alone due to state mandated closures.
“The state agencies did nearly everything within their authority to try to help restaurants, bars and other small businesses who were mandated closed as part of the state’s COVID-19 mitigation strategy,” said Jessica Dunker, president and CEO of the Iowa Restaurant Association. “However, it will take years for our industry to recover. Even with help, we expect to lose as many as 1,000 establishments across the state in the coming months. They just won’t be able to hold on.”
Understanding that not every business needs the same level of assistance, the Association proposes the state use a graduated economic stress test to determine what, if any, forgiveness or deferment of taxes and fees might be offered to impacted businesses. Specifically:
- Forgiveness and/or deferment of sales and payroll tax
- Extension and/or forgiveness of licensing fees
- Assurance that private businesses mandated closed will not be penalized and made to pay unemployment.
“We know that our industry was not the only one that was hurt by COVID-19 closures, but we also know that we were the tip of the spear on this economic calamity,” said Dunker. “We were among the first mandated closed and will be among the last to be allowed to operate at full strength. No one built a profit model based on a 50% operating capacity—so we’re going to continue to struggle.”
Dunker noted that being relieved of state obligations for a period of time could make the difference for many small businesses trying to survive. “We understand the fiscal decisions the state had to make to set aside rainy day emergency funds,” said Dunker. “But the restaurant and bar industry, like many of Iowa’s small businesses, have just been through a hurricane.”