By Jon Taets and Margaret Hardin Mannion, directors of government relations at NACS
This article has been updated to reflect the current legislation.
The House narrowly passed the reconciliation bill early Thursday morning by a vote of 215-214, following often intense negotiations over the past week, a visit from President Donald Trump to the Republican Conference meeting Tuesday morning and a marathon Rules Committee Meeting which began around 1:00 a.m. on Wednesday. Two Republicans joined all Democrats in opposing the bill.
To gain passage, Republican leadership made a series of amendments to the bill including raising the individual state and local tax (SALT) deduction from $30,000 to just over $40,000; moving new work requirements in the Medicaid program to go into effect in December 2026 instead of 2029; and accelerating the phase out of a number of green energy tax credits. The changes were enough to bring most of the holdouts around to vote yes.
Nearly all of the convenience industry’s tax priorities survived negotiations and remained in the package:
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100% Bonus Depreciation is returned for purchases made between January 19, 2025, and December 31, 2029.
Last week, NACS sent a letter to the House Ways and Means Committee voicing support for these changes.
Two items NACS would have liked to see in the package that were left out are a two-year extension of the biodiesel tax credit and an extension of the Work Opportunity Tax Credit.
Notably, the Ways and Means Committee was able to put this package together without increasing taxes on the highest earners, which would have been detrimental to many small businesses, and without making changes to the corporate State and Local Tax Deduction—two items that were mentioned at times during discussions in the weeks leading up to the committee meeting.
Some troubling language remains in the SNAP portion of the bill as reported by the House Agriculture Committee. The committee’s primary cost-saving measures target SNAP and focus on shifting more of a financial responsibility onto states. Currently, administrative costs for the program are split 50/50 between the federal and state governments.The committee’s bill increases the administrative cost share for states to 75% and lowers the federal government’s responsibility to 25%.
More notably, the legislation also introduces a new cost-sharing requirement for the states to cover a portion of the SNAP benefit, which is currently fully funded by the federal government. Under the bill, states would be required to pay for part of the SNAP benefit based on their payment error rates. States with error rates lower than 6% would pay 5% of the benefit, while states with error rates greater than 10% would be on the hook for 25% of the benefit cost. 24 states currently have error rates above that 10% threshold.This provision concerns convenience retailers as many of these states are already financially burdened. By being required to cover more costs, states may try to find their own cost saving measures, including cutting SNAP benefits or restricting products SNAP customers want to buy.
Passage through the House is a significant step towards the bill becoming law and is a major victory for Speaker Mike Johnson (R-LA) and the rest of the House Republican leadership. But the bill must now be sent to the Senate. It is expected that the Senators will seek some changes in order for it to pass that chamber, meaning the House would have to vote again on the amended package or some compromise version between the two chambers.
President Trump wants this bill to pass prior to July 4, but the real deadline is when the U.S. will run out of ways to avoid the statutory debt ceiling, currently predicted for some time in August. The bill also contains a $4 trillion increase in that level, meaning it has to be passed prior to that deadline.