The National Grocers Association (NGA) released the results of a tax survey of its members in a report: Principles of Tax Reform for the Independent Grocery Sector. The report is being shared with Members of Congress, including members of the House Ways and Means Committee and Senate Finance Committee who are undertaking comprehensive tax reform.
“Many try to simplify tax reform into a one sentence talking point that often fails to reflect reality. The results of this survey clearly demonstrate those tax provisions identified by our membership are important to growing the economy and creating jobs,” said Peter J. Larkin, President and CEO, NGA. “Independent retail and wholesale grocers are committed to serving their consumers, communities, and employees. If tax reform is done fairly and equitably they will continue to fulfill that commitment.”
The results of the tax survey developed three main principles that NGA believes must be part of any tax reform legislation.
Principle #1: Tax Reform Must be Fair and Equitable for all Business Entities.
Respondents indicated 57% operate as pass-through entities such as S-Corps or LLCs while 37% operate as C-Corps, highlighting the importance that tax reform must address both individual and corporate rates. Survey respondents illustrated the direct correlation between higher taxes and the adverse effect on their ability to reinvest in their stores and people without going deeper into debt. The Death Tax remains a prominent concern for many with 88% of respondents rating the issue as important.
Principle #2 Tax Provisions that Encourage Capital Investment in Businesses Should be Retained to Continue Creating Jobs and Growing the Economy. Bonus Depreciation was rated by 93% of respondents as important, while 89% rated Section 179 Expensing as important. Survey respondents specifically cited their ability to use these provisions to provide cash flow necessary to reinvest capital in their businesses.
Principle #3 Incentives to Expand Employment Opportunities and Business Investment in Underserved Communities Should be Maintained. Provisions such as the Work Opportunity Tax Credit (WOTC) is an important provision that enables independent grocers to hire workers that typically face barriers to employment, while the New Markets Tax Credit (NMTC) is an essential tool for independent grocers working to open stores in underserved communities.
“NGA member companies and our lobbying team will continue to meet with decision makers on Capitol Hill to ensure the principles outlined in this important report are given strong consideration and become incorporated into comprehensive tax reform.” said Larkin.