NEW YORK, April 2 (Reuters) - Grocer Kroger Co on Friday said expects its tax expenses this year to be higher than previously thought, because of the Obama administration's landmark healthcare law.
The company said it would be unable to take a tax deduction for expresses related to prescription drug coverage for its retired employees, resulting in a fiscal 2010 tax expense $1.5 million to $2 million higher than it otherwise would have been. Most of that will be seen in the first quarter, the company said.
The change in the law has prompted a slew of companies to warn investors of one-time charges, generally in the millions of dollars to $150 million, although AT&T Inc reported an eye-popping $1 billion charge.
The tax deduction is not scheduled to be eliminated until 2013, but Kroger said the entire impact of the tax change relating to future retiree drug costs must be recorded in the period in which the legislation was enacted.
(Reporting by Ilaina Jonas; Editing by Steve Orlofsky) Keywords: KROGER/ (ilaina.jonas@thomsonreuters.com ; +1 646 223 6193; Reuters Messaging: ilaina.jonas.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The company said it would be unable to take a tax deduction for expresses related to prescription drug coverage for its retired employees, resulting in a fiscal 2010 tax expense $1.5 million to $2 million higher than it otherwise would have been. Most of that will be seen in the first quarter, the company said.
The change in the law has prompted a slew of companies to warn investors of one-time charges, generally in the millions of dollars to $150 million, although AT&T Inc reported an eye-popping $1 billion charge.
The tax deduction is not scheduled to be eliminated until 2013, but Kroger said the entire impact of the tax change relating to future retiree drug costs must be recorded in the period in which the legislation was enacted.
(Reporting by Ilaina Jonas; Editing by Steve Orlofsky) Keywords: KROGER/ (ilaina.jonas@thomsonreuters.com ; +1 646 223 6193; Reuters Messaging: ilaina.jonas.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.