WASHINGTON — The Republican takeover of the House of Representatives and gains in the Senate in last week's midterm elections could lead to some tax relief for supermarket operators, industry associations said last week.
“For our members, a major concern is the tax-policy issues,” Tom Wenning, executive vice president, National Grocers Association, told SN. “The uncertainty that exists there has created a problem for not only retailers and wholesalers, but businesses in general in that they cannot plan for the future. They are not going to be making a concerted effort to grow their business and create new jobs until they know what the tax policy is going to be.”
He said he was hopeful that talks during the lame duck session between now and January could address the pending expiration of Bush-era tax cuts as well as the scheduled return of the estate tax in 2011.
The estate tax, which is assessed on inherited wealth, is of particular concern to family-owned businesses, he said. The tax was gradually phased out over the last 10 years but is slated to be reinstated at 55% of estates of $1 million or more. In addition, the scheduled expiration of Bush-era tax cuts could have a “substantial impact” on small retailers that are registered as “S” corporations, limited liability companies, or other “pass-through” entities in which taxes are assessed on individual owners, Wenning explained.
Jennifer Hatcher, group vice president, government relations, Food Marketing Institute, said the incoming Republican senators have voiced support for estate-tax relief, which gives her some optimism that action could be taken. The association has supported compromising on a reduced level of estate tax.
“I think the biggest thing is that we have a whole bunch of new members of Congress that we have to educate and get up to speed on some of our issues,” she told SN, citing significant turnover in the House Agriculture Committee as well as the Energy and Commerce Committee.
She said it appeared likely that Sen. Dave Camp would take over the House Ways & Means Committee, where tax bills are written, and the Michigan Republican has already signaled his support for estate-tax relief as well as an extension of the tax cuts.
Hatcher also noted that with Democrats still holding a slim majority in the Senate, the industry will have to find new Democratic supporters for some issues, especially after the loss of Blanche Lincoln, D-Ark., who had championed estate-tax relief and other issues in her party.
She said the industry was still optimistic about the prospects for more credit- and debit-card interchange fee legislation, especially given that the Department of Justice has taken action against card issuers on credit-card interchange.