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March 17, 2023

Bill to Boost Food Assistance by Closing Tax Loopholes Advances

DENVER, CO - The House today passed legislation on a preliminary vote to close tax loopholes that allow businesses to deduct meal and drink expenses from their taxable income in order to expand access to healthy foods in lower-income and under-served communities and help small food retailers and small family farms.

“Hardworking Coloradans don’t get to deduct the cost of their meals from their taxes, and when rising costs are impacting everyone we need to take a hard look at loopholes in our tax laws,” said Rep. Mike Weissman, D-Aurora. “About 33% of Coloradans do not have reliable access to nutritious food, which leads to chronic health issues and expensive health care bills. This bill will boost small food producers, local farmers and food assistance to support everyday Coloradans by closing a loophole only available to a select few.”

Currently, Colorado taxpayers collectively cover the cost of the “business meals deduction” because state tax deductions are linked to federal tax deductions.  HB23-1008 would “decouple” from these federal income tax deductions, ending the resulting state tax loophole that allows corporations to deduct business meal expenses from their taxes. Ending these tax deductions would support efforts to reduce food insecurity for hard-working Coloradans and fund a tax credit to help our local farmers and food retailers access necessary equipment and better access market opportunities.

This bill builds off bipartisan legislation passed by the General Assembly in 2022 to save Coloradans money on healthy foods.  The fund created by the 2022 legislation supports programs including the Community Nutrition Incentive Program, which assists women, children, and older Coloradans in subscribing to weekly produce deliveries from a local farm; the Double Up Food Bucks Program, which doubles the value of SNAP benefits in participating markets and stores for fruits and vegetables; and the Community Food Access program, which allows more small retailers to acquire equipment to store and sell produce and supports small family farms in connecting their crops to market demand.

HB23-1008 supports and extends these efforts by creating an income tax credit for small food retailers and small family farms and Community Food Access Program consortium participants to cover 75% of the cost of new systems, equipment, and food distribution costs. Partnerships between Colorado farms and food producers boosts revenue and cycles money into local economies.

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