New CHEFS Act Offers Small Restaurants Up to 35% Tax Credit for Installing Pollution Controls

The newly introduced Cutting Harmful Emissions in Food Service Act, or CHEFS Act, is rolling out a federal tax break designed to help small restaurants clean up their air emissions. Specifically, this bill creates a new Qualified Emissions Control Device Credit, offering businesses a sliding-scale tax credit for the cost of installing equipment that traps fine particulate matter (PM2.5) from wood-burning stoves or char broilers.

The Kitchen Cleanup Tax Break

Think of this as a significant financial incentive to go green in the kitchen. If you run a small business that meets the Small Business Administration’s size standards and you use one of these specific cooking methods, you can claim a credit ranging from 10% to 35% of your installation costs. The more you spend on the equipment, the higher the percentage back: costs up to $30,000 net you 10%, while costs exceeding $150,000 max out at 35% (Sec. 2). For a small restaurant owner facing a $100,000 bill for a new scrubber system, this means a $25,000 tax credit, which is a massive help in offsetting the initial capital expense.

Historic Buildings Get a Bonus

There’s an extra sweetener for restaurants operating in older buildings. If your location is in an eligible historical building—meaning it’s 50 years old or more—you get a bonus percentage added to your base rate. Restaurants in buildings 100 years old or less get an extra 10 percentage points, while those in buildings over a century old get an extra 15 percentage points (Sec. 2). This provision is smart because it not only incentivizes air quality improvements but also provides financial support to businesses maintaining older, often more expensive-to-renovate, properties.

The Fine Print: What Counts and the Catch

While the goal is clear—reduce PM2.5 pollution—the bill defines a “qualified emissions control device” simply as “any gear that traps PM2.5 to keep it from polluting the air.” This definition is pretty broad. While it’s good for flexibility, it means the industry will need clear guidance on which devices actually meet the standard and qualify for the credit, preventing restaurants from installing low-quality equipment that doesn't significantly reduce pollution. The credit applies to tax years starting one year after the Act becomes law.

Crucially, the bill has rules to prevent “double dipping.” If you claim this new credit for an expense, you cannot claim any other tax deduction or credit for that same amount. Furthermore, the credit must reduce the tax basis of the equipment (Sec. 2). This means you can’t deduct the full cost of the equipment and take the credit; the credit you receive reduces the amount you can later deduct through depreciation. On a positive note for small business accounting, the bill classifies these pollution control devices as “3-year property” for depreciation, allowing for quicker write-offs than standard equipment (Sec. 168(e)(3)(A)).

Overall, the CHEFS Act offers a significant, direct financial incentive that addresses a real air quality issue often associated with popular restaurant equipment. For small businesses, it turns a potentially huge, unfunded mandate into a manageable, tax-supported upgrade.