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Washington, D.C. (May 19, 2022) \u2013 Today, the U.S. Senate failed to advance the Small Business COVID Relief Act of 2022 (S. 4008), ending the possibility of replenishing the Restaurant Revitalization Fund (RRF).
The Restaurant Revitalization Fund grants are exempt from federal income taxes.
Tax Relief for Hospitality Businesses Hospitality Minnesota supports 1) ensuring Restaurant Revitalization Fund grants and other federal relief are tax free; 2) phasing out the state levy property tax; 3) exempting restaurant equipment from the sales tax; 4) providing property tax relief to small resorts by increasing ...
Funds received from the RRF are not treated as taxable income, and expenditures paid with these funds are tax deductible. In the NIPAs, RRF payments to businesses for eligible expenses are classified as subsidies and are recorded on an accrual basis based on when the funds are used by the business for expenses.
California does not tax Restaurant Revitalization Grant as income.
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As a result, no adjustment will generally be required on 2021 Virginia income tax returns for taxpayers that have business expenses funded forgiven PPP loan proceeds, EIDL program funding, and Restaurant Revitalization grants during Taxable Year 2021.

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