Bloomberg Tax: Instacart Drops California Tax Credit Effort After Labor Protest

April 19, 2022 Media

Instacart dropped its application for a $21 million California tax credit in the face of opposition from labor groups critical of the delivery company’s business model and its support for a 2020 ballot measure exempting gig delivery workers from state employment rules.

The company asked that its credit award agreement be pulled from the California Competes Committee’s Thursday meeting agenda. The panel’s five members, appointed by the governor and legislative leadership, review and approve tax credit awards at public meetings, and the labor groups would have had the opportunity to speak out against Instacart’s application in a continuation of their fight over working conditions in the gig economy.

Public attention leading up to Instacart’s decision to withdraw its application contrasts with the secrecy that surrounds similar state and local tax credit programs in California and around the country, said Pat Garofalo, director of state and local tax policy at the American Economic Liberties Project.

“This is exactly why these types of corporate subsidy deals need to go through a public process,” he said. “This is a great win for transparency.”