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Senator proposes tax credit to encourage grocery sourcing from New Hampshire farms
Summary
Senate Bill 637 (the "Eat Local Act") would give retailers a business-profits tax credit equal to 10% of qualifying purchases from registered New Hampshire farms if at least 10% of annual inventory (by cost) comes from those farms; retailers would be expected to reduce prices on qualifying items by 10% as a condition of the credit. DRA raised technical questions about benchmarks, timing and spoilage.
Senate Bill 637, introduced by Senator Rebecca Perkins Quoko, would create a business-profits tax credit to encourage groceries and food retailers to source at least 10% of their product inventory by cost from registered New Hampshire farms. The credit would equal 10% of the amount paid to qualifying local farms and could be carried forward for up to five tax years.
Perkins framed the bill as voluntary and consumer-facing: as part of accepting the credit, retailers would be expected to lower the shelf price of qualifying local items by 10% to make fresh local food more affordable for working families.
Department of Revenue Administration analyst Lauren O. Sullivan told the committee DRA takes no position on the policy but flagged several technical issues: the bill does not specify whether the 10% reduction is measured against the farm’s suggested retail price or another benchmark; as drafted DRA reads the credit to require purchased and sold products to fall in the same taxable period (creating timing complications); and spoilage, donations or inventory held across periods may not qualify unless the language is amended. DRA suggested specifying the first taxable period the credit would apply to — for example, taxable periods ending on or after December 31, 2027 — to allow agencies to set up a registry and reporting mechanisms.
Senators pressed on enforcement and practicality: how to measure the 10% inventory threshold, how to document transactions to farms, and whether the Department of Agriculture (which manages farm registration) might be a better partner than BEA for the registry. Perkins said she was willing to work on those clarifications.
The committee did not vote on SB 637 at this hearing; DRA recommended technical clarifications before the bill advances.
