Vine Solutions Presents: Every Day Value, The Restaurant Accounting and Operations Blog » Vine Client Information

Business Meal Tax Deduction Proposal

Vine Admin — Thu, 13 May 2010 17:38:31 +0000

Prior to 1993, the Federal Tax deduction rate for business meals was set at a reasonable 80% of the total cost. Since then, the rate has been set at a lowly 50%, creating a vast distinction between all other business expenses which are set at 100%. Many small business owners and restaurateurs see this disparity as a cause for complaint.

The National Restaurant Association in conjunction with many members of Congress, have been lobbying to have the percentage restored to its original rate of 80% which would help ease the pockets for many who utilize dining as a critical means for conducting business. Representatives Shelly Berkeley of Nevada and Daniel Inouye from Hawaii, have been leading the legislation within the Senate floor to allow for the original rate to be reinstated.

In addition to the already long list of positive outcomes associated with increasing the Business Meal Tax Deduction rate, the most prominent being the generation of $18 billion for the economy and an almost $6 billion in business meal sales, according to the National Restaurant Association. “Increasing the business-meal deduction is critical to small and independent business, especially in foodservice, travel, tourism, and entertainment…It would also immediately help stimulate the economy.” states David Koenig, the Association’s Tax and Profitability Director.

The National Restaurant Association urges restaurateurs and small business owners to voice their opinion on the Business Meal Tax Deduction, and support the bill which would once again increase the meal deduction to 80%, and help to stimulate the economy and generate more business for the restaurant industry.

Proposed Gift Card Legislation leaves many up in Arms

Vine Admin — Tue, 06 Apr 2010 19:02:38 +0000

The current law pertaining to the usage of gift cards can vary depending on the store or restaurant’s policy where the gift card is being redeemed or purchased. However, this freedom on behalf of the retailer and/or restaurateur in creating their own rules is dangerously close to being revoked. With the recent proposal for legislation by Senator Ellen Corbett, she hopes to mandate that restaurants be forced to cash out gift cards with a monetary value of $20.00 or less to all patrons.

Many are taking steps to insure this law does not go into effect due largely because of the potentially negative implications this could cause restaurants as a whole. As stated by the California Restaurant Association which vehemently opposes this law, “Under the SB 885 (gift card cash out proposal), a restaurant could issue a gift card, incur the fees associated with the issuance of the card…, and then be forced to pay the full amount upon redemption.” Restaurants could find themselves at a grave disadvantage given the fact that under the proposed law, the allowances by patrons require no purchase in order to redeem the cash from the gift card.

In addition to the negative repercussions due to money loss for restaurants, this proposition for legislation also creates another potential threat for both consumers and restaurateurs alike. Because under the proposed law any one person may enter into a restaurant establishment and receive cash on the spot, the chances for heightened security fraud increase. Gift cards not only have a greater chance of being stolen, but also make it more enticing for criminals with a stolen credit card to purchase gift cards either online or at a restaurant and receive cash instantaneously.

The California Restaurant Association along with many restaurateurs, are advocating that those also in opposition with the current proposal for SB 885, contact their local state Senator. Let them know of your discontentment with the law’s specifications as well as your concern for the overall harmful effects it could pose for the restaurant industry as a whole.

For Vine Clients: Your 2010 Budget Timeline

John Priest — Wed, 07 Oct 2009 18:46:38 +0000

By John Priest

It’s time to start thinking about your 2010 budgets. After the completion of the October P&L’s, Vine Solutions will begin the budgeting process for our clients. Below you will find a general process/timeline for the 2010 budget cycle. Though most restaurant industry experts do predict growth for next year, the expected growth will be modest as the U.S. economy slowly eases out of the recession in 2010. Keep that in mind as you think about the assumptions for your 2010 budget. Please contact your Vine Solutions client manager if you have any questions regarding the budget process.

1) Following the October P&L’s in early November, your Vine Solutions client manager will forward the year-to-date trend sheet which gives YTD sales, expenses, cover counts, and guest check averages information.

2) With the YTD trend information, client will determine the base changes they would like to see for 2010 in: sales % increase/decrease, check average, and expenses.

3) Client manager will then work up a preliminary budget from those assumptions and send back to client for review: proposed deadline November 25th

4) Client will review the preliminary budget and advise Client Manager of any further changes.

5) Comments and changes to budget should be complete within two weeks of receiving the preliminary budget in order for the budget to be complete by no later than December 18 to be ready for 2010.

John Priest is the VP of Operations at Vine Solutions. Vine Solutions, Inc. was incorporated in 1996 and has offices in Corte Madera and Santa Monica, California. Vine Solutions, Inc., provides accounting and financial advisory services to a variety of high volume independent restaurants and regional chains. For more information, e-mail Vine Solutions at info@vinesolutions.com, follow us on twitter at twitter.com/VineSolutions or read our blog at restaurantaccountingblog.com.