Community pharmacy group endorses new language in tax reform bill that would help pharmacy owners.
The NCPA has given a thumbs-up to new language in the House of Representatives GOP tax proposal that is designed to provide small business/pharmacy owners tax relief as pass-through entities under current law.
The organization said that House Ways and Means Committee Chairman Kevin Brady (R-TX) amended the proposed “Tax Cut & Jobs Act” (HR 1) to address concerns raised by NCPA and other groups representing small businesses.
In a statement, NCPA CEO B. Douglas Hoey, RPh, said: “NCPA strongly supports House Ways and Means Chairman Brady’s amendment in the tax relief bill. It will bring substantial relief to the 22,000 independent community pharmacies we represent.” In August NCPA sent a letter to the committee urging Congressional leadership to address tax fairness for small business owners. “Unlike large corporations, many small businesses are treated as pass-through entities under current law and are taxed at the higher personal income rate,” Hoey noted.
Brady’s amendment, according to NCPA, creates a new 9% tax rate for the first $75,000 of income for a married active business owner with less than $150,000 in pass-through business income. This is an improvement from the original 12% rate in the tax bill.
NCPA stated that independent community pharmacies employ thousands of Americans and help improve the health of millions of patients.
“Unfortunately, due to low reimbursements for the prescriptions we dispense, such as with the proliferation of DIR fees, pharmacies operate with slim profit margins,” Hoey said. He added that NCPA will “encourage” the Senate to include a comparable provision in its tax reform proposal.
Scotty Sykes, a CPA with Sykes & Company in Edenton, NC, said that there are also proposals on salary requirements for those pharmacy owners who are S corporations and partnerships. “I think overall, I would expect a net positive here for the pharmacy owner,” he said.