NGA News

Independent Grocers Urge Senate to Protect Pass-Through Businesses in Tax Reform

Nov 28, 2017

ARLINGTON, Va. (November 28, 2017) – The National Grocers Association (NGA), the trade association representing the independent supermarket industry, and 152 state trade associations and food retailers today urged the U.S. Senate to pass comprehensive tax reform that creates a more level playing field for supermarkets operating as pass-through businesses.

In a letter to Senators, the grocers expressed support for the Tax Cuts and Jobs Act, but contend that the bill falls short of achieving rate parity between C-corporations and pass-through entities, which make up nearly half of NGA’s member companies. The proposed effective tax rate on qualifying pass-through businesses would be approximately 32 percent, or 12 percent above that of C-corporations.

“America’s pass-through independent supermarkets are a large and vital part of the economy and the new lower business tax rate needs to reflect their importance by being broadly applied and effectively enforced,” the group wrote to senators. “We urge Congress to support reforms that create a more level playing field for Main Street supermarkets so they can grow their businesses and create local jobs.”

In September, House and Senate leaders released a Unified Framework that pledged to treat pass-through businesses fairly in relation to their corporate competitors and called for a rate differential of five percentage points. The Senate bill ignores this promise and sunsets the pass-through deduction in seven years.

“Independent supermarkets are driving innovation in the marketplace. From implementing e-commerce strategies to developing new formats that enhance the customer experience, independent grocers are truly leading the way. We know tax reform can help these entrepreneurs to continue to invest in their communities, employees, and communities. We look forward to working with you and your colleagues to grow this important sector of the economy,” the letter concludes.

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Additional Media Resources

  • For the full letter, click HERE.