The Illinois Department of Commerce and Economic Opportunity and the Illinois Retail Merchants Association announced support for new legislation that would create a streamlined package of tax incentives for independently owned grocery stores and pharmacies across the state.

The bill, HB5828, is known as EDGE Essentials. Backers say it would help small businesses invest in their operations, retain and hire workers, and continue serving communities, particularly in underserved areas with limited access to groceries or pharmacies.

The legislation is sponsored by House Assistant Majority Leader Will Guzzardi, D-Chicago, and State Senator Doris Turner, D-Springfield.

Who qualifies

Under the program, eligible businesses would need to be independently owned, with no more than four stores, and plan to make a qualifying capital investment of at least $500,000. Grocery stores with more than 15 employees would be required to make a capital investment of at least $1 million. Participating grocers would also be required to accept Supplemental Nutrition Assistance Program (SNAP) and Women, Infants, and Children (WIC) benefits.

What the incentives offer

EDGE Essentials would establish two primary benefits:

  • Payroll withholding credits: Businesses located in food or pharmacy deserts could receive a credit of up to 100% of payroll withholding for new employees and 50% for retained employees. Businesses outside designated deserts could receive credits of up to 75% for new employees and 25% for retained employees.
  • Enterprise Zone High Impact Business benefits: Eligible businesses would be automatically enrolled in the Enterprise Zone High Impact Business Program, providing access to applicable tax benefits, including a sales tax exemption on qualifying building materials.

The program would offer enhanced incentives for businesses located in designated food or pharmacy deserts, where maintaining access to essential goods and services can be especially challenging, according to the release.

Supporters weigh in

"Independent grocers and pharmacies are important parts of the local economy, creating jobs, investing in their communities, and making sure families can access the everyday essentials they need," said DCEO Director Kristin Richards. "By making it easier for independent retailers to access incentives for hiring and expansion, we can support small businesses while strengthening local economies and helping communities across our state thrive."

"Pharmacies and grocery stores are essential to the health and wellbeing of communities throughout Illinois, but these businesses operate on the very thinnest of margins and are finding it increasingly difficult to keep their doors open," said Rob Karr, president and CEO of the Illinois Retail Merchants Association. "EDGE Essentials will help relieve some pressure by providing tax benefits to independent grocery stores and pharmacies in exchange for meaningful investments, including hiring and retaining employees, and improving property and store fronts."

"Our state's tax incentives can't just be about helping big corporation land big projects," said Guzzardi. "We can use tax policy to help small independent businesses meet basic needs in underserved communities. That's what EDGE Essentials will do: help independent grocery stores and pharmacies provide affordable food and medicine in parts of our state that desperately need them."

"Independently owned grocery stores and pharmacies are essential to communities across Illinois," said Turner. "When we invest in small businesses, we are investing in the people who live here."

Edwin Muldrow, owner and pharmacist at Del-Kar Pharmacy in North Lawndale, said the measure would help small operators stay open. "EDGE Essentials will help the small guys like me stay open and continue to serve my community," he said. "This isn't a handout, it's a partnership between the state and businesses to help foster investment and maintain access to food and medicine."

Addressing rising costs

The legislation responds to changes in national policy affecting food assistance and independent retailers, the release said. Federal changes to SNAP, unpredictable tariffs and rising fuel costs have raised costs for households already experiencing food insecurity and for independent grocers that depend in part on SNAP-supported sales, according to the announcement.

Source: the original release