The U.S. House of Representatives approved its tax bill Thursday, drawing cheers from industry business groups who said the bill among other benefits would spark competitiveness and new investment while repealing onerous penalties on family-owned businesses. The proposal, called the Tax Cuts and Jobs Act, “amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.”
The bill reduces the corporate tax rate from a maximum of 35% to a flat 20% rate (25% for personal services corporations).
In the wake of the bills’ passing, leaders from various retail associations spoke out in its favor. Pamela G. Bailey, president and CEO of the Grocery Manufacturers Association (GMA) issued the following statement:
“Today’s House vote is a major milestone towards passage of the first comprehensive tax reform legislation in more than 30 years. As the largest sector of American manufacturing jobs, the food, beverage and consumer products industry urges the House and Senate to continue their push to enact tax reform that lowers tax rates for our manufacturers, helps U.S. manufacturers be competitive in global markets, and reduces the tax burden for middle-class American consumers. These tax reforms will generate more U.S. jobs and greater economic growth.
“The food, beverage and consumer products industry plays a unique role in America as the single largest U.S. manufacturing sector, with 2.1 million jobs in 30,000 communities across the country. Our industry is a critical driver of the economy and touches the lives of every American family every day. Passage of tax reform would be good for families, good for workers, and good for manufacturers.”
National Grocers Association (NGA) president commended the House for passing the act, adding that the NGA is pleased that the bill will lower the corporate rate and retains important tax provisions that drive the growth of the independent supermarket industry such as the interest expense deduction, the advertising deduction, and the LIFO accounting method.
“In addition, permanently ending the estate tax will allow family-owned business to pass their stores to the next generation,” he said, adding that the NGA is concerned, however, regarding the treatment of the pass-throughs in the bill.
“Recently, NGA and 85 of our member companies and allied state associations from across the country sent a letter to the House urging parity between c-corps and pass-through entities,” he commented. “Tax reform that precludes a large portion of American companies from taking full advantage of relief only hampers potential growth opportunities for Main Street businesses. NGA calls on the Senate to address this important issue. We remain committed to working with both the House and Senate to support a final bill that ensures all businesses can take full advantage of tax reform so they can continue to invest in their communities and create local jobs."
FMI's chief public policy officer, Jennifer Hatcher, and Retail Industry Leaders Association (RILA) EVP of government affairs, Jennifer Safavian, both applauded the passage of the bill. Hatcher affirmed that FMI remains committed to working with the House and Senate leadership to make sure the final legislation reaches President Trump’s desk. Safavian said that retailers are grateful for the Senate Finance Committee's leadership in moving tax reform towards the finish line.
“With reform that lowers rates, retailers can focus on investing in their businesses, stimulating growth, creating jobs, and offering American consumers innovative customer experiences,” Safavian said. “With the holiday shopping season in full swing, we urge the Senate to quickly pass reform that works for retail and American families."