The Tax Cuts and Jobs Act signed into law by President Trump on Dec. 22 could have a deleterious impact on the Westport-based Newman”™s Own Foundation, which now faces a 200 percent federal excise tax on the value of the for-profit food company it owns due to a provision that was cut.
The Newman’s Own food company gives away all of its profits to charity, and an exemption for Newman”™s Own Foundation”™s ownership of the food company was included in the original versions of the House and Senate tax bills. It was dropped from the final bill after Senate Parliamentarian Elizabeth MacDonough ruled that the exemption was among several items that violated the so-called Byrd Rule that restricts the types of provisions that can be included in legislative reconciliation measures.
Bob Forrester, president and CEO of the Newman”™s Own Foundation, said that it would be extremely difficult to sell the food company to a third party because of its mission of donating all of its profits to charitable works.
“Nobody has the authority to say ”˜You have to go out of business,”™ but they have the authority to make you pay a 200 percent tax rate that in effect makes you go out of business,” he said.