Spotlight on Tax Policy: What Grocers Need to Know
In the wake of the 2020 “Day in Washington” supermarket industry fly-in, which was held virtually this year and featured topics of greatest concern to grocers, Progressive Grocer had the opportunity to discuss tax policy with Andrew Harig, VP of tax, trade, sustainability and policy development at Arlington, Virginia-based FMI — The Food Industry Association, which presented the event along with the Washington, D.C.-based National Grocers Association, which represents the independent sector of the industry.
Progressive Grocer: What are the key tax issues facing food retailers and why?
Andrew Harig: The recent calls to scale back significant portions of the 2017 tax legislation would have an outsized impact on our ability to play a significant role in the communities we serve as both job creators and taxpayers.
An increase in the corporate tax rate, for instance, would impede on our ability to invest in development plans, like opening new stores, refurbishing existing operations and investing in new technologies that enhance the customer experience. Amid the ongoing recession, this could negatively impact economic recovery. Similarly, revising or repealing the 20% pass-through deduction would have a significant impact on the hardworking businesspeople who operate family-owned or closely held grocery stores and supermarkets, and would disadvantage these small businesses against their larger competitors and create an unbalanced playing field.
PG: What are the best solutions to these issues?
AH: In addition to maintaining the current corporate tax rate and pass-through deductions, we believe Congress can take a significant step toward helping the food wholesale and retail industry adapt and recover from the pandemic by passing the Healthy Workplaces Act.
Over the last year, our industry has had to make major changes and investments to respond to the pandemic, support our communities and workers, and keep Americans fed throughout the worst months of the crisis. To do so, grocery operators spent more than $24 million on everything from PPE to increased store sanitation to keep their doors open and employees and customers safe. This bill would provide a much needed 50% credit against payroll taxes for these expenses and other “qualified employee protection expenses.”
PG: How is FMI working to address these issues?
AH: FMI is working with the National Grocers Association to help connect local grocers across the country with members of Congress so lawmakers can hear firsthand how the industry has responded to the pandemic and the challenges the industry has faced. That has been a key focus this week for FMI and NGA during our virtual “Day in Washington,” as we urge Congress to maintain a tax code that allows our industry and the communities we serve to thrive.
At the same time, we’re continuing to educate both the public and policymakers about how the food wholesale and retail industry is a significant economic force in every state and district across the U.S. And, as a result, we pay billions in taxes every year — our “fair share” and beyond. That means new taxes would have a real impact on our industry and could hurt job creation, the economic recovery, and the community service and development that is essential to our businesses.
