States Work to Save Small Businesses

Federal funds and creative thinking provide a lifeline.

March 15, 2021

Small Business Employee

ALEXANDRIA, Va.—State legislatures are coming up with creative supports to help keep restaurants and small businesses afloat in the months ahead, reports, all in addition to preparing to allocate billions of dollars in pandemic relief funding.

Across the United States, various actions are being taken to ease the burden on foodservice retailers. Last week, New Mexico Gov. Michelle Lujan Grisham signed legislation giving a four-month holiday from gross receipts taxes to restaurants, bars, breweries and wineries. Up north, Michigan legislators have proposed waiving fees for health inspections and alcohol permits. In Texas, lawmakers are considering slashing taxes on mixed drinks temporarily. Over to the east, a sales tax credit for small businesses worth up to $9,000 over three months was approved by a Maryland lawmaker.

Thirty-eight states have enacted grant programs targeted at small businesses. Some grants are small—just up to $2,500 in Wisconsin and up to $5,000 in Connecticut and Montana for example. Others are large. Delaware will provide up to $100,000 in funding, and Massachusetts caps its grants at $75,000.

The money comes from the $1.9 trillion stimulus package, which was passed this week, NACS Daily reported. The bill earmarked $28.6 billion in direct aid to restaurants and calls for distributing the money in grants of up to $5 million for restaurants in need, or $10 million to operations with multiple locations. Restaurants must apply to receive a grant.

“We’ve been seeing a lot of targeted grants, a lot of tax incentives. They’re doing the math, and the economics suggest that some of these small investments might have a very big overall return,” stated Edgar Velasco, who oversees budget and fiscal issues at Stateside, a Virginia-based lobbying firm.

Large businesses are receiving some assistance too. Wyoming has set aside grants specifically for large businesses and is considering stipends of up to $1.5 million for businesses that paid at least $1 million in taxes in 2019, in order to prevent the state’s largest employers from shutting down.

But most programs focus on small businesses, and lawmakers are taking a special interest in protecting restaurants, which have been especially hard-hit during the pandemic. According to the Nation’s Restaurant Association, one in five restaurants across the country has temporarily or permanently closed, and at least 2 million restaurant workers remain unemployed.

Some foodservice operators remained open thanks in part to states and cities relaxing rules on alcohol sales. Early in the pandemic, no state allowed bars and restaurants to sell alcoholic beverages to go. Now, 32 states and the District of Columbia permit to-go sales, and several states are considering legislation to codify the temporary rules.

The restaurant association estimates alcohol sales alone allowed restaurants to hire an additional one to two employees. “For restauranteurs right now, every dollar matters,” said Mike Whatley, vice president for state and local affairs, National Restaurant Association. “It’s going to be a long road ahead.”

Still, getting grants has become a challenge in and of itself for some businesses. Money from the federal Paycheck Protection Program (PPP), dried up before some businesses could access it. As such, this time, some places like Chattanooga and Kansas City have crafted public-private partnerships with local banks, accountants and chambers of commerce to help businesses prepare the necessary paperwork to qualify for the next round of funding.

Discover answers to guide your post-pandemic plan by exploring the NACS COVID Survival Pack—a four-hour learning experience filled with tips and advice for navigating a range of operational challenges, including people, foodservice, vendors and systems in a post-pandemic workplace. Watch the COVID Survival Pack today.

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.