AUGUSTA, Maine — A new attack on the grocery chain Whole Foods has united lawmakers who rarely agree and attracted a similarly wide-ranging group of opponents, with some calling the idea an abuse of the tax code.
Whole Foods Market, the Amazon-owned company with a single Maine store in Portland, has become a target of the state’s iconic lobster fishery and its supporters across the political spectrum since it stopped selling Maine lobster in November, citing sustainability concerns.
In a Maine-flavored riff on punishments being tried by state-level politicians across the country, a group of influential lawmakers is trying to repeal a tax break for Whole Foods. On the other side, the Mills administration and tax watchers argue it would be hard to administer or call it an inappropriate use of a tax policy.
“Punitively taxing the business equipment of stores that decline to carry a particular item is an abuse of the tax code,” said Jared Walczak, a top state tax expert at the center-right Tax Foundation.
The measure would remove businesses that stop selling Maine products based on third-party certifications from a business equipment tax exemption. It would apply to Whole Foods since the company cited two sustainability groups that pulled their endorsement of Maine lobster over concerns about threats to the endangered right whale.
It is led by Senate Minority Leader Trey Stewart, R-Presque Isle, while his co-sponsors include his political rival, Senate President Troy Jackson, D-Allagash, who represents a neighboring Aroostook district. House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, who is a lobsterman, also has touted the bill among others aiming to support the industry.
At a news conference last week, Stewart derided Whole Foods as an “overpriced yuppie chain.” He framed the dispute as one mostly about marketing in an interview, saying his concern was less that the stores were not selling lobster than the marketing aspect of the chain buying into the sustainability concerns.
Whole Foods cited a Seafood Watch list that roiled the industry in September by recommending avoiding lobster over the fishery’s alleged impacts on endangered whales. The Maine Lobstermen’s Association backs Stewart’s measure, with spokesperson Kevin Kelley saying certifications “should be based on sound science.”
“There are forces at play that are actively trying to give our industry and our state a black eye, and we’re not doing anything about it,” Stewart said.
Maine’s dispute with Seafood Watch coincided with proposed federal limits on lobstering to protect right whales. The congressional delegation took heat out of the issue by winning a six-year rule pause in December. Politicians and fishermen often say the list and other concerns about the fishery rest on flawed science, noting there have been no whale entanglements linked to Maine gear since 2004.
Lawmakers are still active on lobstering issues, though. The tax break that Stewart is targeting has been declining in value over the past few years. In 2019, it was valued at roughly $58,000, while the Portland Press Herald reported it was down to $38,000 or so last year.
At a hearing last week, the governor’s administration opposed the measure, citing concerns about constitutionality and how the program would be administered, while the retail and grocery industries cited fears it could punish stores if other products lose certifications.
The measure can be tied to a growing populist effort around taxes. For example, Republican Gov. Ron DeSantis of Florida got lawmakers to advance a measure this month giving him more control over a government body overseeing Disney’s special tax status after the company opposed his law limiting classroom instruction on sexual orientation and gender identity.
Stewart noted that the state has special tax breaks for manufacturers like Bath Iron Works and the Penobscot McCrum plant in Washburn, saying the government has an interest in promoting industries. Jackson’s spokesperson likened it to his efforts to protect Maine loggers from Canadian competition and urged top Republicans to join him on that issue.
“Maine tax dollars should always be used to support Maine businesses that support Maine workers,” Jackson said.
But there is opposition on principle across the spectrum as well.
Matthew Gagnon, the CEO of the conservative Maine Policy Institute, used his Bangor Daily News column to say that the bill would inappropriately pick “winners and losers.” Rep. Joe Perry of Bangor, a top Democrat on the tax committee, has long wondered if retailers should get the tax break, but said this proposal isn’t “workable.”
“If the sponsor and the president of the Senate can figure out a way to make this work, they are more skilled than I,” Perry said.