In its December 2020 Special Session, the Colorado legislature targeted financial relief for the state’s restaurants, bars, and hospitality operators.
The bill package is the most direct form of monetary aid for Colorado’s food and beverage industry during COVID-19. One of the most basic regulatory requirements for operators — paying annual liquor and food license fees — will be waived in 2021. Industry members must continue to monitor potential federal relief packages and new state proposals during the Colorado General Assembly’s regular session starting in January 2021. The Special Session funding and relief measures are summarized below.
Liquor License Fee Waiver
Senate Bill 20B-001 directs the Colorado Liquor Enforcement Division (LED) to waive state liquor license fees for the next 12 months for bars, restaurants, and several other liquor license holders. New liquor license application fees for opening establishments are also waived. With annual state fees for Hotel and Restaurant and Tavern licensees normally costing $500 per location, and new license applications costing $1,550, these waivers provide a respite from traditional recurring fees.
Food License Fee Waiver
Senate Bill 20B-001 also authorizes the waiver of annual retail food license fees for restaurants and food vendors through December 2021. Such fees are normally collected by local health agencies. In lieu of collecting annual food license fees, counties and health agencies may contract with the Colorado Department of Public Health and Environment (CDPHE) to receive state funding. The outcome for Colorado food operators should be fee savings during the next year.
Sales Tax Relief
House Bill 20B-1004 allows restaurants, bars, food trucks, and other food and beverage businesses to pay reduced sales tax for the crucial months of November 2020 to February 2021. Eligible businesses may retain up to $2,000 in state sales tax per month during the grace period. Since retail businesses typically have one state sales tax account that covers multiple locations, the stimulus applies to a maximum of five locations per business.
Food Delivery Fee Caps
During the pandemic, third-party food delivery fees remain a challenging issue within the industry. Following national trends and several local legislative efforts like the City of Denver, the Colorado legislature broke new ground with House Bill 20B-1005. Under this law, local governments may enact restrictions on delivery services operating within their jurisdictions. Such measures may include caps on the fees charged to restaurants and other food vendors, protections for delivery drivers, disclosures to customers, and business-to-business consent requirements. These powers are specific to the COVID-19 pandemic and are designed to assist the local restaurant and food industry.
Direct Funding to Businesses
Finally, like other Colorado small businesses with indoor capacity restrictions, restaurants and bars may qualify for financial grants from the local governments where they operate. Senate Bill 20B-001 is the most direct form of stimulus for the Special Session and allows Colorado local governments to provide payments ranging from $3,500 to $7,000 to certain businesses. Eligibility criteria is based on the financial situation of each business and the COVID-19 public health status in the county where located. Read more about financial assistance for small businesses.
Immediate Next Steps
To determine eligibility and start preparing for potential Special Session stimulus relief:
- Find the COVID-19 public health status in your county
- Review your state and local liquor and food licenses for each business location. Check current status and keep copies accessible.
- Collect your financial data, revenues, and tax receipts, especially since March 2020.
- Check local government programs for food delivery caps and small business grants where you operate.
In the coming weeks, the LED and CDPHE will publish guidance regarding the 2021 license fee waivers. From January to May 2021, the Colorado legislature will likely consider additional relief packages during its regular session.
What is written here is intended as general information and is not to be construed as legal advice. If legal advice is needed, you should consult an attorney.