By Bill Lay
“Close to perfect, far from normal” is the long-time motto of our small island paradise. It also closely mirrors my experience as a Key West business owner. I first started working in the restaurant industry in the early 2000s. After years of helping restaurant chains grow their own brands, I decided to establish my own hospitality identity and bought Irish Kevin’s. Things grew rapidly from there and I became the owner and managing member of La Trattoria, Catered Affairs and Virgilio’s. Things were about as perfect as could be when I started, but today, business is far from normal.
We’ve been resilient through the economic roller coaster of the last several years. When the COVID-19 pandemic hit, my accountant told me I needed to lay off my employees or I would go broke. But I doubled down and kept everybody working. Servers became painters; cooks became construction renovators and everyone stayed employed until we saw signs of light again.
But the financial burdens have only increased over time, as we are continually pummeled with high labor, rent and insurance costs; supply chain disruptions; inflationary food and equipment expenses; and skyrocketing credit card processing fees.
The restaurant industry runs on razor-thin margins, as low as 3%. So we rely heavily on customer traffic and volume to make ends meet. We also rely heavily on a tax structure that offers much-needed relief to businesses like mine and those of families across the nation. That is why I am asking U.S. Sen. Marco Rubio and the rest of our Florida congressional delegation to pass the Tax Relief for American Families and Workers Act, known as House Bill 7024.
Restaurant operators often rely on debt financing to ensure we have the necessary cash flow for payroll, rent and other operating expenses. Business interest deductibility based on the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) standard, rather than the EBIT (Earnings Before Interest and Taxes) standard is critical and allows us to buy equipment, expand our dining rooms or open new locations. Restoring the EBITDA standard for deductibility means I can invest in my businesses and repay loans more effectively. Without this restoration, my tax burdens could increase by up to 30%, severely limiting my ability to make improvements and grow.
The bill also allows for 100% bonus depreciation for equipment purchases, a provision that is invaluable to restaurant operators. From kitchen ovens to catering vehicles, the ability to immediately deduct the cost of new capital assets encourages growth and efficiency. Without provisions like this, I am at a standstill and cannot grow.
Importantly, the bill also includes provisions that enhance the Child Tax Credit (CTC). This increase is particularly impactful for lower-income families with multiple children, offering an automatic inflation adjustment and expanded refundability. As an employer to more than 100 Floridians, supporting families is very important to me and our economy.
Our community, known for its vibrant culture and unique dining experiences, relies heavily on the success of local restaurants to drive tourism and economic growth. But things are tighter than ever, and we are just one hurricane away from the drop in customer traffic that could close our doors permanently.
The tax relief bill is not a cure-all, but it is certainly a shot in the arm that can keep us going. I urge Senator Rubio and our congressional delegation to pass this important legislation.
To read the full text of the bill, along with an analysis of its impacts, visit congress.gov/bill/118th-congress/house-bill/7024.
Bill Lay is owner and managing member of La Trattoria, Catered Affairs and Virgilio’s in Key West.
