NCPA said Tuesday that it has sent a letter to Sen. Orrin Hatch (R., Utah), chairman of the Senate Finance Committee, and Rep. Kevin Brady (R., Texas), chairman of the House Ways & Means Committee, that calls for alignment of tax rates for small businesses with those for corporate entities.
Current tax law treats many of the 22,000 independent pharmacies that NCPA represents as “pass-through” small businesses instead of as corporate entities. Consequently, the pharmacies’ revenue is deemed as personal income and subject to a higher tax rate.
“Community pharmacists are among the most accessible and most trusted health care providers and work with patients to manage chronic health conditions and counsel them on proper use of medication. Unfortunately, the current tax code penalizes many of these community pharmacies for being established as small-business pass-through entities rather than corporate entities,” NCPA chief executive officer B. Douglas Hoey wrote in the letter.
“We urge your committees to include provisions that would align the small-business tax rate with that of corporate entities, which would assist the administration in fulfilling its goal of rebuilding Main Street,” Hoey added. “We believe there must be tax parity in order for small businesses to invest in the future and for job creation to flourish. In the case of independent pharmacies, such tax parity would help allow them to expand to provide additional patient services to improve the health of their communities.”