Abbott Bans Dining at Texas Restaurants. Houston Mogul Urges Abbott to Waive Tax Payments.

Bobby Heugel, a heavy hitter in the Houston restaurant scene, is calling on Gov. Greg Abbott to temporarily waive liquor and sales tax payments for Texas restaurants and bars in light of recent closures to prevent the spread of COVID-19.

Abbott released an executive order Thursday banning eating and drinking at all Texas restaurants and bars but allowing take-out and delivery services. This is similar to actions taken in Houston. 

Abbott’s order also bans gatherings of more than 10 people, closes schools, closes gyms, and bans visits to nursing homes except for critical care. The order goes into effect at midnight Friday and lasts through midnight April 3, Texas Tribune reported.

On Monday, Houston Mayor Sylvester Turner, Harris County Judge Lina Hidalgo, and other local health officials announced new measures to help contain the coronavirus. This included ordering all restaurants, bars, and nightclubs to halt in-service dining, but it allowed for continuation of carry-out, delivery, or drive-thru services.

Heugel, owner of Houston’s Anvil Bar & Refuge, Better Luck Tomorrow, the Pastry War, Penny Quarter, Tongue-Cut Sparrow and Squable, took to Instagram on Wednesday to demonstrate why to-go sales isn’t enough for restaurants to get by.

Heugel’s “Restaurant & Bar Survival Math:”

“I have $X dollars in my bank account at X 🍕 [pizza] Restaurant. 

• 33 percent of that pie is already allocated to wages for our staff for the past two weeks of work.
• 25 percent of that is allocated to next month’s rent.
• 25 percent of that is allocated to the upcoming liquor and sales tax bills due THIS FRIDAY.
• The remaining 15 percent needs to pay vendors who also have employees and other costs.
• Whatever is leftover goes to paying off the massive amount of debt it took to open X 🍕 Restaurant,” Heugel explained on Instagram.

“Normally, this isn’t a big deal (even if this is a super-oversimplified, mostly inaccurate, I’m not fitting a whole P&L’s text on here, summary). But there isn’t money just laying around to pay employees without sales. We rely on weekly financial injections. And no, to-go sales aren’t the answer. We aren’t magically turning into a f**king Dominos overnight,” Heugel said.

The restaurant mogul wrote a letter to Abbott, urging him to provide support for those in the hospitality industry. Heugel also drafted a sample version of the letter for others to send to the governor, available on Google Docs. 

In addition to waiving liquor and sales tax payments, which would be due this Friday, Heugel asked Abbott to “consider assisting both hospitality landlords and tenants in negotiating mortgage and rent relief so that restaurants and bars can focus on staff welfare, maintaining employment, and preserving their businesses.”

Texas would not be the first state to temporarily adjust tax deadlines. Maryland and California have already taken action to assist businesses during the coronavirus pandemic.

Last Wednesday, Maryland Comptroller Peter Franchot announced he would extend business-related tax filings to June 1. 

“This extension will provide much-needed relief to our business owners as they adjust to changes in consumer behavior, tourism trends and employee workforce output,” Franchot said.

California Gov. Gavin Newsom announced a 60-day delay to state tax filing for individuals and businesses last Thursday.

Washington and Oregon have also provided tax relief guidelines for taxpayers and business that may qualify.

The American Institute of Public Accounting has created a State Tax Filing Guidance for Coronavirus Pandemic chart to compare action taken on a state-by-state basis.

Earlier this week, Texas Comptroller Glenn Hegar encouraged businesses to take advantage of the agency’s online tools to remit the sales tax for the month of February by the March 20 deadline.

“These dollars, however, represent money collected from individual Texans, and Texans expect those dollars to be available to provide emergency health care and support other emergency operations during this difficult time,” he said. ““I ask our partners in the business community to make a good-faith effort to pay taxes held in trust from before the outbreak began impacting their operations.”

For future tax due dates, Hegar said each will be evaluated as they approach, and he will keep stakeholders and lawmakers apprised of his office’s determinations.

Updated March 20, 2020:

The House Freedom Caucus have sent a letter asking Comptroller Hegar to waive all penalties and interests for sales tax payments not paid on time. They cited “lack of revenues due to virus-related declines in sales and closures challenge Texas businesses.” According to the Quorum Report, some Democratic lawmakers shared these concerns.

Reform Austin will continue to update this article as more information becomes available.