US lawmakers look to reinstate tax break for seafood processors

Lawmakers from the U.S. state of Washington want to fully reinstate a tax break that allows the seafood sector to deduct meals they are required to provide employees at remote seafood processing facilities and on vessels.

The Remote Seafood Employee Meals Tax Parity Act is the latest effort by Pacific Northwest lawmakers to restore the tax deduction, which was limited by Congress in 2017. Seafood processors claim that the loss of the full deduction is a significant cost for their business.

“Members of the Pacific Seafood Processors Association are struggling under the weight of excessive costs, among other challenges, including loss of the tax deduction for the costs of employer-provided meals,” Pacific Seafood Processors Association President Julie Decker said. “Remote Alaskan seafood processing plants – which take fish deliveries from thousands of Washington-based fishermen – may house up to hundreds of employees for short processing seasons, and processors must provide thousands of meals daily per plant as an essential function. Loss of this deduction was an unintended outcome of the 2017 tax act, and our members have urgently sought to restore this deduction since then.”

Bill sponsor U.S. Rep. Suzan DeBene (D-Washington) said the 2017 tax law was designed to crack down on employers who offered free meals as a perk despite the availability of offsite food but has unfairly hurt seafood processors, who are forced to provide meals to employees at remote locations where no other food is available. The 2017 legislation limited tax deductions on employer-provided meals to 50 percent, and the entire deduction is set to be eliminated after 2025.

“The 2017 tax law had serious unintended consequences on the Pacific Northwest’s seafood industry,” DelBene said. “Our proposal would restore the balance and fairness Congress originally intended and address inadequate meal expense deductions, recognizing that some industries have no other means to support their workforce. We must do more to protect these dedicated workers who feed our communities and boost our economy, and our bill fills a critical need.”

“The reduced deductions we have seen in recent years have not only hurt the seafood industry and its workers but could seriously interrupt the workforce pipeline if it is eliminated as planned in 2025,” U.S. Rep. Dan Newhouse (R-Washington), a co-sponsor of the bill, said. “It is vital we protect an industry that significantly contributes to our economy and communities.”

The Remote Seafood Employee Meals Tax Parity Act would eliminate the 50 percent limitation on the tax deduction for meals provided on fishing vessels, fish-processing vessels, and fish-processing facilities located above 50 degrees north latitude that are not within a metropolitan statistical area.

Prior versions of the legislation introduced respectively in 2019 and 2021 failed to gain traction in the U.S. House of Representatives.

Photo courtesy of the Office of U.S. Rep. Suzan DelBene