Scan down allowances

From the 2024 DOR Tax Exemption Study

82.04.43396 - Scan down allowances Description Sellers may take a B&O tax deduction for income received from scan-down allowances. "Scan-down allowance" means a payment or credit offered to a seller by a manufacturer or wholesaler of products, where all the following are true: - The amount of the payment or credit is based on the quantity of the product to be sold at retail by the seller within a specified period. - The seller knew the terms of the offer before making the sales. - The seller is not required to provide any services or engage in any business activities directly or indirectly benefiting the manufacturer or wholesaler. "Product" is defined as: - Food and food ingredients, whether or not exempt from sales tax. - Pet food and specialty pet food. Purpose To resolve an issue regarding the application of B&O tax law. This also lowers taxes for grocers, grocer manufacturers, and grocer wholesalers. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.440 $0.440 $0.440 $0.440 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026