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Some Massachusetts Restaurants Can Defer Meals Taxes Until June

Gov. Charlie Baker announced the emergency regulation on Wednesday, two days before a round of taxes is due

Stock photograph of a male chef in a restaurant kitchen, walking behind shelves full of silver pots and pans Per Winbladh/Getty Images

Some Massachusetts restaurants and bars are getting a bit of a reprieve in a time of financial uncertainty brought on by the novel coronavirus pandemic: Gov. Charlie Baker announced today that emergency regulations are being finalized this week to allow small businesses to push back payment of several taxes until June, including meals taxes.

Eligible businesses will be able to delay — without penalty — sales, meals, and room occupancy taxes for March, April, and May until June 20. Businesses that paid less than $150,000 in 2019 sales and meals or room occupancy taxes are eligible.

The move comes as Massachusetts’ restaurant scene is partially shut down until at least April 6, with all dine-in service prohibited. All restaurants in the state have either temporarily closed or are only offering delivery and/or takeout in an effort to keep some staff employed and continue bringing in some money.

It’s a particularly bleak situation for many restaurants that don’t usually offer or focus on takeout and delivery. “Limiting restaurants to takeout is awful because it provides legal reasoning for your landlord and insurance company to say that you were allowed to operate,” as Daniel Myers, who owns Cambridge restaurant Loyal Nine, told Eater before today’s emergency regulations were announced. “We literally do less than one percent of sales in takeout, and the profit margin is comparable — three percent. We pay rent for seating space, not kitchen space for takeout only.”

Myers also noted that he pays approximately $13,000 in meals taxes monthly. Depending on the exact numbers from 2019, that could put him just over the threshold of eligibility for this tax relief. He is one of many local restaurateurs who have been vocal about getting help from the state legislature — in particular, a cancellation of the meals tax until businesses are able to fully operate again.

Baker’s new regulations provide a three-month delay, but not a cancellation, and will exclude many restaurants that are small but not small enough. Will it be enough to help keep Massachusetts restaurants afloat?

State to Give Small Businesses Respite on Sales and Other Taxes [BBJ]