Amid a two-week emergency closure, 50 Chicago restaurants are calling for tax relief and support for furloughed workers.
“We and all who work with us are calling for your help. Many small restaurant owners and hourly employees won’t be able to survive the restaurant slowdown and now closure,” said Rick Bayless, chef and owner at Frontera and seven-time James Beard award winner, in a video posted to Twitter on March 15 addressing Illinois Gov. J.B. Pritzker (D). “We are calling on you to immediately announce a plan, No. 1, to support emergency unemployment benefits to all hourly and salaried workers furloughed during this crisis. No. 2, to eliminate payroll tax, and No. 3, to call for rent and loan abatement for workers impacted by the closure of the restaurant industry.”
Pritzker has already filed emergency rules on March 11 to extend unemployment benefits to those unable to work due to the coronavirus, and has waived the seven-day waiting period for residents to apply for benefits. Jordan Abudayyeh, a spokeswoman for the governor's office, told Tax Notes the governor was working with the federal delegation and congressional leaders to push the Trump administration to allow the state to increase unemployment benefits beyond 26 weeks.
On March 16, Pritzker announced guidance banning onsite food consumption at restaurants and bars across the state until March 30, to prevent the spread of the coronavirus. The guidance also covers concession stands at movie theaters, coffee shops, and cafes. Food trucks, grocery stores, and concessions at O’Hare and Midway airports are exempt.
“This is another hard step to take. I know how difficult this will be on small businesses around the state. But we must do everything we can to safeguard the health of the citizens of Illinois, and that requires this urgent action,” Pritzker said.
Pritzker had strong words for the large crowds gathering and waiting in lines outside bars for St. Patrick’s Day celebrations March 14, despite the city's cancellation of the annual parade and festivities. "The time for persuasion and public appeals is over — the time for action is here. This is not a joke. No one is immune to this, and you have an obligation to act in the best interests of all the people of this state," he said.
People can still enter restaurants for delivery and carry-out, and drive-thrus can remain open. Chicago Mayor Lori Lightfoot (D) joined Grubhub March 13 in announcing the suspension of up to $100 million in delivery commission payments nationwide for affected independent restaurants.
Pritzker thanked the Illinois Restaurant Association for helping his administration troubleshoot the issue. Sam Toia, president and CEO of the association, told Tax Notes in a March 17 email that the association is working with state and federal officials on business concerns over the temporary closure.
“Our team remains vigilant in helping Illinois’ hospitality industry navigate the immediate challenges that come with this rapidly changing landscape, and we will be here to advocate on behalf of recovery and economic relief for our industry in the days and weeks ahead,” Toia said.
It's unclear what form the relief will take and when details will start to take shape. State lawmakers were set to reconvene their legislative session March 18, but the session was suspended for the week. Rep. David McSweeney (R), revenue committee member, called for an immediate 25 percent cut in the state’s sales tax.
Nick Kokonas, co-owner of the Alinea Group of restaurants and CEO of Tock, an online restaurant booking system, tweeted March 8 that Lightfoot should reduce the city’s 11.75 percent sales tax on restaurants, but told Tax Notes that “everything is way worse” now.
“That is the least of what the city and state will need to do,” Kokonas said. “That said, the state and city were already financially troubled. It's hard to see how to increase demand in a situation where people cannot gather.” He advocated for action on restaurants’ fixed costs with a payroll tax elimination and rent abatements, but added that he thinks a “huge percentage of restaurants may not be able to recover” even in the best-case scenario.