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June 2, 2023

SIGNED! Bill to Boost Food Assistance by Closing Tax Loopholes Becomes Law

AURORA, CO - Governor Polis today signed legislation into law 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.

“Everyday Coloradans don’t get a tax break on their lunches, and neither should wealthy corporations,” 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 new law will boost small food producers, local farmers and food assistance to support everyday Coloradans by closing a loophole only available to a select few.”

“Working people in my district and across the state don’t get a tax break on their lunches, and too many of them don’t have enough to eat at all," said Senator Rhonda Fields, D-Aurora. “I am happy to close this tax loophole that only benefits the wealthiest Coloradans, and redirect the funds toward addressing food insecurity so that more Coloradans can afford to put food on the table.”

“Family owned farms and food retailers need our support more than corporate boardrooms," said Senator Nick Hinrichsen, D-Pueblo. “This bill will reduce hunger and strengthen local supply chains in urban and rural parts of Colorado, with a minimal impact on state finances.”

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 supports efforts to reduce food insecurity for hard-working Coloradans and fund a tax credit to help our local farmers and food retailers acquire 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 funding allocated 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 demands.

HB23-1008 supports and extends these efforts by creating an income tax credit for small food retailers, small family farms and Community Food Consortium members worth 85% of the cost of new systems, equipment, and food distribution in 2024, and 75% in following years. Partnerships between Colorado food producers and small retailers boost revenue and cycle money into local economies. It also appropriates $250,000 to the Department of Public Health and Environment to provide healthy eating program incentives for low-income Coloradans and improve access to fresh, Colorado-grown produce.

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