WASHINGTON The National Restaurant Association praised legislation introduced Friday that would increase the federal tax deduction for business meals from 50 percent to 80 percent — a change businesses have pursued unsuccessfully for 16 years.
The measure, H.R. 3333, was introduced by Rep. Neil Abercrombie, D-Hawaii, who had previously championed business meal tax legislation in 2005 and 2007.
While opponents of similar measures have argued that Washington would lose tax revenue if the deductible were increased, the NRA maintains that any tax shortfall would be offset by a resulting hike in sales. According to NRA research, an increase in the tax deduction for business meals to 80 percent would hike business meal sales by $6 billion annually and create an $18 billion increase to the overall economy.
Dawn Sweeney, president and chief executive of the NRA, said the legislation Òwould help restore, sustain and create jobs and provide a tremendous boost to the economy.
"We believe that particularly during these difficult economic times, the cost of business meals should be treated fairly along with other allowed business deduction," she said.
Business meal deductibility first was decreased to 80 percent in 1986 and then to 50 percent in 1993. Since then the industry has been working to restore the write-off to 80 percent, if not the original 100 percent.