With Tax Day Approaching, TRA Highlights Industry Wins from Recent Reforms

With Tax Day Approaching, Texas Restaurant Association Highlights Direct and Indirect Industry Wins from Recent Reforms

AUSTIN, TX (April 14, 2026) - As Tax Day approaches, the Texas Restaurant Association (TRA) is highlighting significant wins for restaurant operators, employees and guests following the passage of last year's federal tax reform package, known as the One Big Beautiful Bill or the Working Families Tax Cut Act, signed into law on July 4.

After over two years of sustained advocacy alongside the National Restaurant Association and other partners, the industry successfully secured key reforms that deliver meaningful financial relief, long-term certainty and increased opportunity for growth.

"The economic relief provided by last year's tax reforms couldn't come at a better time for local restaurants and the millions of Americans who depend on them," said Kelsey Erickson Streufert, Chief Public Affairs Officer of the Texas Restaurant Association. "From rising gas prices to escalating food costs, there are many factors outside restaurants' control right now. At the TRA, we're working hard to offset these cost increases, redoubling our advocacy, member benefit and education work so restaurants can continue to focus on what they do best-serving their communities. New tax savings are an important example of the advocacy wins that we can achieve by working together as one industry."

Direct Wins for Restaurants: Predictability & Working Capital
The tax reform package delivers several direct benefits to restaurant operators-about 90% of which are small businesses with 50 or fewer employees. Unlike prior tax reform packages, each of these reforms was made permanent, delivering much-needed predictability to local restaurants.

Permanent reforms for restaurant operators include:

• Qualified Business Income. Over 75% of restaurant businesses are structured as "pass-through" entities. Now they can rely on a permanent 20% deduction that shields small business owners from double taxation.
• Full Expensing for Capital Investments. Restaurants can now immediately deduct 100% of qualifying investments-such as kitchen equipment, furniture and technology updates-rather than depreciating them over time. This provision is retroactive to January 20, 2025, freeing up capital to invest in our local economy.
• Business Interest Deduction Fix. Under the restored EBITDA-based calculation, operators can deduct more of their interest expenses from their tax bill, helping preserve cash flow for capital-intense businesses like restaurants.
• Estate Tax Relief. Multi-generational family businesses now benefit from increased estate tax exemptions, indexed to inflation. This will make it easier for family restaurants to continue operating for decades to come.

Indirect Wins for Restaurants: Workforce-Focused Tax Relief
Restaurants will also see significant benefits from tax reforms that will put more cash into the hands of American workers. While these reforms are not permanent, they are likely to create a jolt of energy for our local economy. For example:

• No Taxes on Tips: Employees in restaurants and other industries may deduct up to $25,000 in annual tips from their taxable income. The National Restaurant Association estimates that this will save restaurant workers $528 million this year in Texas alone.
• No Taxes on Overtime: Employees may deduct up to $12,500 in annual overtime pay from their taxable income ($25,000 for joint filers). For an employee earning $50,000 a year, including $10,000 in overtime pay, the National Restaurant Association estimates that this policy will save the employee nearly $400.

"These provisions are a win not just for restaurant employees, but also for local businesses like restaurants," Streufert said. "Millions of Americans are about to see larger tax refunds for the first time because no taxes on tips and overtime have taken effect, and we know that money doesn't sit on the sidelines-it gets spent in local communities. That means more people dining out, more support for small businesses and a much-needed boost at a time when restaurants and consumers alike are facing rising costs."

Restaurants can access tools to help them navigate the latest tax reforms by visiting https://restaurant.org/issues-and-advocacy/tax-reform/ and by signing up for the TRA's weekly newsletter here.

ABOUT THE TEXAS RESTAURANT ASSOCIATION
Formed in 1937, the Texas Restaurant Association (TRA) serves as the advocate and indispensable resource for the foodservice industry in Texas. As a leading business association, the TRA represents the state's $137 billion restaurant industry, which encompasses upwards of 57,000 locations and a workforce of over 1.4 million employees. Along with the Texas Restaurant Foundation, the workforce development arm of the TRA, the association proudly continues to protect, advance, and educate a growing industry as the TRA celebrates its 89th anniversary year. For more information, please visit www.txrestaurant.org.