By Jonathan Levens and Brian Renshaw  at Moore Colson CPAs and Advisors

The enactment of the Tax Cuts & Jobs Act (TCJA) contains many provisions that significantly change the tax landscape for both individuals and businesses. Here are four key changes that will have a significant impact on restaurant industry businesses (and their owners) and three strategies to consider:
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1. Overall Reduction in Tax Rates
Restaurants that are structured as pass-through entities may benefit from the lowering of the individual tax rates. The highest individual tax rate was lowered from 39.6% to 37%. In addition, the total income amount that results in the application of the highest marginal tax rate was increased.

Effective January 1, 2018, restaurants operating as C-Corporations will now be taxed at a flat 21% federal income tax rate. This is a substantial decrease from the prior law which provided for a maximum rate of 35%. The tax rate applicable to qualified dividend distributions was unchanged.

2. Bonus Depreciation and Increased Section 179 Expense
The previous bonus depreciation requirement for property to be “original use” has been eliminated. As a result, bonus depreciation is available for both new and used property (applicable to property acquired after September 27, 2017). In addition, the bonus depreciation percentage has been increased to 100% for acquisitions occurring between September 28, 2017, and December 31, 2022 (i.e. 100% of the cost of qualified property can be expensed in the year of acquisition).

By Jonathan Page, Esq., Managing Attorney at InPrime Legal
 
Introduction
A great way to protect your valuable business assets is by registering your trade name with the United States Patent & Trademark Office (USPTO). This process helps stop competitors from using your name and good reputation to obtain benefits and damage your enterprise.
 
Simply using your business name in commerce does afford you some rights. However, formally registering a trademark — a “word, name, symbol, device, or any combination” — secures additional protections:
 

• It puts consumers and your competitors on notice that your trademark belongs to your company and can only be used to identify your goods and products (and not similar goods and services).

 

• Through formal registration, you also gain the ability to sue for trademark infringement in federal court, collect additional damages and request an injunction to stop someone else from using your trademark.

​By Timothy Watt, Partner at Bennett Thrasher

All of your blood, sweat, and tears have been poured into your restaurant, but the time has come - you’ve decided to divest ownership of your restaurant. When you’re preparing to sell a restaurant, there are a number of ways to make your business more appealing to potential buyers, ranging from cosmetic updates and repairs to improving the quality of the financial records you will provide to prospective buyers.

The scope of this article is to address financial and federal tax issues a restaurant seller should consider with the intent to better prepare the seller for a successful sales process.

GET FINANCIAL RECORDS READY
The more organized and complete financials you can provide, the more appealing you will be to quality buyers and more likely you will achieve a higher selling price. Financial records include the income statement, which is a record of income and expenses, and a balance sheet, which is a list of assets such as accounts receivable, inventory, equipment, furniture, real estate and leasehold improvements along with any accounts payable and debts on the business. These two reports are the most basic records a prospective buyer will request. Other more detailed information that is also often required will be discussed in further detail in the “Due Diligence” section of this article.

By Lisa Wilson, Showroom Sales Rep at ACityDiscount

This is the life of bar owners: hard work, long hours and constant problem solving – from busted pipes in the bathroom and unruly customers to technical issues with the point-of-sale system and inventory purgatory. 

Unless you have capital to throw at these challenges, you’re going to handle most of these issues, big and small – 24/7.
Still, bar ownership is a dream of many ACityDiscount customers; a dream that if nurtured properly, can lead to profitable results. That’s why I created a list of questions future bar owners should address before grand openings.