Skip to main content

Legislation would give retailers COVID-19-related tax credit

Ben Franklin with face mask

Legislation has been introduced that  would give retailers and other businesses a tax credit to help defray the costs of measures required to make workplaces safe during the COVID-19 pandemic. 

The National Retail Federation welcomed the Healthy Workplace Tax Credit , which would provide a refundable tax credit against payroll taxes for 50% of costs incurred by businesses for COVID-19 testing, personal protective equipment, disinfecting, extra cleaning and reconfiguring workspaces. The credit is limited to $1,000 per employee per quarter for a company’s first 500 employees, $750 for the next 500 and $500 for each employee thereafter.

A 40-employee retail store or restaurant, for example, that spends $60,000 on covered costs would receive a $30,000 tax credit. If the credit exceeds the business’s employer payroll tax obligations, the excess would be provided in the form of a refund.

Some mid-size retailers have reported that the cost of safety measures can be as high as $1 million a week. Face masks alone can cost $1 per employee per day, or $30,000 a day for a 30,000-employee retailer.

“Consumer-facing businesses are confronting considerable new costs to make their locations safe for their customers and employees,” said NRF senior VP for government relations David French. “This tax credit addresses many of those new expenses, including the costs of reconfiguring stores and restaurants to provide more social distancing, and ongoing costs for protective gear and cleaning.

“A tax credit is particularly helpful for businesses that are facing reduced sales after months of being closed and are encountering these costs as they take the steps necessary to assure their customers that it is safe to return,” he added.

The Healthy Workplace Tax Credit would be created under legislation that was introduced by Representative Tom Rice, R-S.C., a member of the House Ways and Means Committee. NRF has worked with members of the committee to seek introduction of the bill.

This ad will auto-close in 10 seconds