S.1732 - Creating Hospitality Economic Enhancement for Restaurants and Servers Act; CHEERS Act (119th Congress)
Summary
S.1732, the CHEERS Act, proposes an amendment to the Internal Revenue Code of 1986. It aims to classify energy-efficient kegs as efficient commercial building property, making them eligible for the energy-efficient commercial buildings deduction under Section 179D. This bill targets restaurants, bars, and entertainment venues, incentivizing the use of energy-efficient draft equipment.
Expected Effects
If enacted, the CHEERS Act would reduce the tax burden for businesses investing in energy-efficient draft systems. This could lead to increased adoption of such systems within the hospitality sector. The bill also directs the Secretary to issue regulations to guide the implementation, including treatment for leased equipment.
Potential Benefits
- Reduced Tax Burden: Restaurants and bars can benefit from tax deductions for investing in energy-efficient kegs.
- Energy Efficiency: Encourages the use of more energy-efficient equipment in the hospitality sector.
- Business Growth: Potential cost savings could be reinvested in businesses, fostering growth.
- Environmental Benefits: Reduced energy consumption contributes to a smaller carbon footprint.
- Regulatory Clarity: Directs the Secretary to provide guidance, ensuring proper implementation.
Potential Disadvantages
- Limited Scope: The bill primarily benefits businesses in the hospitality sector, potentially creating disparities.
- Complexity: The amendment adds complexity to the tax code, requiring businesses to navigate new regulations.
- Potential for Abuse: There is a risk of misclassification or misuse of the deduction, requiring careful oversight.
- Revenue Impact: The tax deduction could lead to a slight reduction in government revenue.
- Administrative Burden: The IRS will need to develop and enforce new regulations, increasing administrative costs.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble), as it aims to promote economic activity and energy efficiency. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States, as stated in Article I, Section 8, Clause 1. The bill falls under Congress's power to regulate commerce and enact tax laws.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).