Kroger says health reform will cause tax expense to grow
Kroger Co. said it will no longer be able to take a certain tax deduction as a result of the Patient Protection and Affordable Care Act, impacting its 2010 tax expense.
In a filing with the Securities and Exchange Commission, the company said it won’t be able to deduct expenses it incurs to provide prescription drug coverage to retired employees, which are reimbursed under the Medicare Part D retiree drug subsidy program.
Kroger said it now expects its fiscal 2010 tax expense to be about $1.5 million to $2 million higher than normal.
The Cincinnati-based supermarket operator said most retired employees do not receive a prescription drug benefit from the company. Instead, a large percentage of Kroger workers are covered by collective bargaining agreements and receive a prescription drug benefit through a multiemployer plan that Kroger pays into, according to the filing. The health reform laws won’t affect Kroger’s tax deduction for those plans, the company said.
Kroger (NYSE: KR), headquartered in Cincinnati, operates more than 2,400 supermarkets and multi-department stores in 31 states.
Filed under: management by Specialist