New proposed legislation would provide a 100 percent tax credit to food and beverage distributors to offset uncollectable debt for products that were shipped to operators before COVID-19 shutdowns.
The Providing Liquidity for Uncollectible Sales (PLUS) Act was introduced by congressmen Darin Hood (R-IL) and Jimmy Panetta (D-CA) and would cover wholesale distributors “engaged in the trade or business of selling inventory to food and beverage establishments.” If passed as written, the tax credit would apply for uncollectible debt from food and beverage establishments that were ordered to close for at least 30 days between March 25, 2020 and July 15,2020.
“Through no fault of their own, many establishments were forced to close and now face significant capacity restrictions as states reopen,” LaHood said in a statement. “The bipartisan PLUS Act will allow distributors to continue supporting their customers during this difficult time while covering previous purchases that food and beverage establishments will be unlikely to cover due to forced closures.”
The International Foodservice Distributors Association (IFDA), which represents the $300-billion foodservice distribution industry, is supporting the legislation. “This debt is a significant limitation on distributor liquidity when they need it most, the IFDA said. “The PLUS Act provides tax credits for the $12.2 billion in outstanding debts owed to distributors by restaurants. This legislation provides the liquidity distributors need to continue to extend credit to their restaurant customers and help them get back on their feet as the economy restarts.