NCA Takes Border Adjustment Tax Fight to Washington

The National Coffee Association (NCA) is heading to Washington, DC this week to lobby against a Border Adjustment Tax (BAT) for the US coffee industry. NCA members will meet with Senate and House legislators and their staffs on Wednesday (24 May) and Thursday (25 May) in a series of pre-arranged meetings. The two-day “Fly-In” to Capitol Hill will spotlight a BAT’s negative impact on the industry and argue for an exemption for green coffee. The meetings align NCA members’ business locations with legislative districts, creating constituent meetings that carry more weight.

A BAT is part of the comprehensive Ryan-Brady tax reform framework, proposed to offset a lowered corporate tax rate to 20% from the current 35%. An alternative White House plan would lower the rate to 15%, and Treasury Secretary Steven Mnuchin says a BAT remains under discussion.

In short, the BAT would make profits from imports, as well as exports, taxable. Bottom line, that means a 15% or 20% across-the-board tax on green coffee imports. Since the US climate limits coffee farming to Hawaii and Puerto Rico, 99.9% of green coffee must be imported. Thus, a BAT effectively puts a tariff on the raw material on which the industry relies.

The NCA is framing the issue with detailed background information and member briefings. In the meetings, NCA members will bolster industry arguments by noting their facilities’ contributions to the local economy. The NCA also spotlights the industry’s US economic contribution in its Understanding the Economic Impact of the US Coffee Industry, the first-ever industry economic impact study. The coffee industry generates USD $225.2 billion in revenue a year – nearly 1.6% of the US Gross Domestic Product (GDP) – creates about 1.7 million jobs, and contributes federal, state and local tax receipts totaling USD $28 billion annually.

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