The sudden closing of bars and restaurants across the nation as a result of Covid-19 left a huge pile of inventory — everything from beer to fish to potatoes — rotting. In some cases, the operator was able to donate the inventory to food banks. In other cases, especially when beer is involved, it had to be simply dumped after going bad.
Now a coalition of 19 food and beverage associations, led by several beer industry groups, are seeking a tax credit for the invoice value of that inventory.
“The pandemic caused the abrupt closure of bars, restaurants, and other on-premise
food and beverage retailers; the termination of scheduled classes at colleges and universities; the cancellation of sporting events and music festivals; and other significant and sudden disruptions to the marketplace. As a result, . . .businesses in the food and beverage supply chain have suffered an overwhelming loss in inventory that has spoiled or expired during COVID-19 shutdowns and is no longer merchantable,” the National Beer Wholesalers Association, Beer Institute, Brewers Association and America’s Beverage Licensees said in a letter to Senate Majority Leader Mitch McConnell and Senate Minority Leader Church Schumer. The letter was reviewed by Kane’s Beverage News Daily.
‘These shock-losses of perishable food and beverages have hit industries across the board, including meat, poultry, pork and fish suppliers; food distributors and retailers; bakers; restaurants; vending machines; the fresh produce industry; the confections industry; the beverage industry; beer producers, distributors, and retailers; and many others,” the letter states.
The associations want Congress to pass a “targeted one-time business tax credit” for the invoice cost of unsaleable inventory, including beer, fish, meat, produce, etc. That would “help mitigate substantial losses” in their industries, the letter says.
A tax credit is worth much more than a tax deduction — a credit is applied as a payment against taxes, and therefore can be refunded if there is no tax liability,