The American Rescue Plan Act of 2021 (ARPA) established a $30 billion Restaurant Revitalization Fund (RRF) for 2021 administered by the Small Business Administration (SBA) to provide funding to help restaurants and other eligible businesses continue operating despite facing pandemic related revenue-losses. Of the funds provided, $5 billion was specifically allocated to restaurants whose gross receipts in 2019 were less than $500,000. Public companies, government-managed businesses, entities, and affiliates that have more than 20 locations do not qualify for the program.
Recipients of RRF funds are not required to repay the funding if the funds are used for eligible expenses no later than March 11, 2023. Eligible expenses include payroll costs, mortgage payments, rent, utilities, maintenance expenses, operational expenses, paid sick leave, and supplies. 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.