Grocery, pharmacy tax incentives proposal could expand
(The Center Square) – New legislation in the Illinois House could provide small, independent grocery and pharmacy owners with tax credits.
Illinois Retail Merchants Association President and CEO Rob Karr said the EDGE ESSENTIALS initiative builds on the state’s EDGE tax credit program.
“So you can combine them together to get a potentially nice win that can move the ball forward for pharmacy and grocery, and then our hope is it’s successful and we can expand it to others,” Karr said at a press conference in Chicago on Wednesday.
House Bill 5828 requires businesses to be independently owned, with no more than four stores, and plans to make a qualifying capital investment of at least $500,000. Grocery stores with more than 15 employees would be required to make a capital investment of at least $1 million.
“Depending on whether the grocery or pharmacy is in an underserved area otherwise known as a desert, the credit will range between 50% and 100% of withholding tax for retained or newly-hired employees,” Karr said.
Grocers would also be required to accept Supplemental Nutrition Assistance Program and Women, Infants, and Children benefits.
HB 5828 allows grants for equipment upgrades to grocery stores owned and operated by local governmental units. Funding may also include reimbursement for investment in point-of-sale systems to accommodate SNAP and WIC transactions.
Eligible businesses would be automatically enrolled in the Enterprise Zone High Impact Business Program, providing access to a sales tax exemption on qualifying building materials.
Edwin Muldrow, owner of Del-Kar Pharmacy in Chicago, said pharmacy reimbursements present a unique challenge as operating costs rise.
“About 10 years ago, we would make at least $4 to $4.50 per prescription item, but now we are receiving 10 to 20 cents per prescription item. How are we supposed to stay in business?” Muldrow said.
State Rep. Will Guzzardi, D-Chicago, said small, independent businesses need state support to grow and expand into communities that lack grocery stores and pharmacies.
“We’re going to help you make that investment. We’re going to lower your tax payments. We’re going to provide you this incentive to go grow in a neighborhood that needs your business,” Guzzardi said.
Guzzardi said he was optimistic lawmakers would pass HB 5828 during the upcoming fall veto session.
“Tax policy is really a statement of our values,” Guzzardi said.
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