New legislation in the House of Representatives could give retailers some financial relief amid the coronavirus crisis.
U.S. Rep. Tom Rice (R-S.C.), a member of the House Ways and Means Committee, yesterday introduced the Healthy Workplace Tax Credit, which would offer a refundable tax credit against payroll taxes, for 50% of the costs incurred for COVID-19 safety measures. That includes testing, personal protection equipment, disinfecting, extra cleaning and reconfiguring workspaces.
As an example, Rice’s office explained: A small business with 40 employees that spends $60,000 on PPE, testing, disinfecting and Plexiglass shields will receive a $30,000 tax credit against its payroll taxes.
The National Retail Federation cheered the announcement, noting that it has been working with the Ways and Means committee to bring forward the legislation.
“Consumer-facing businesses are confronting considerable new costs to make their locations safe for their customers and employees,” said David French, NRF’s SVP for government relations. “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.”
According to the trade association, some mid-size retailers are spending as much as $1 million a week on safety measures. It added that face masks alone can cost $1 per employee per day.
Throughout the coronavirus pandemic, retailers have been shouldering these extra financial burdens in order to bring workers back into stores, at a time when revenue is drastically diminished. Total sales from the April to June period were down 8.1% year over year, according to the U.S. Commerce Department, despite major gains in the last two months and big spikes in e-commerce spending.
And the need for safety measures does not appear to be waning. On Thursday, the country reported more than 75,000 new cases of COVID-19, a new single-day record for the U.S. As a result, a growing number of states are now requiring people wear face masks while in public, and major retailers such as Walmart, Kohl’s and Target announced mask mandates this week.
A new survey suggests that retailers appear to be taking the right steps to protect workers, according to their employees. Retail display technology company Raydiant surveyed 500 currently-employed retail associates from May 21-27, and the vast majority said they felt their safety and wellbeing was a priority to their employers during the reopening process.
Respondents also displayed confidence in the safety training provided by their employers, which bodes well for customers returning to stores. Only 17.3% reported that they had received no or minimal training ahead of reopening.