SALES TAXES IN CASH-OUT DEMONSTRATION PROJECTS.

SEC. 1755. SALES TAXES IN CASH-OUT DEMONSTRATION PROJECTS. Section 17(b)(1) (7 U.S.C. 2026(b)(1)) is amended— (1) by inserting “(A)” after the paragraph designation; and (2) by adding at the end the following new subparagraph: “(B) (i) No waiver or demonstration program shall be approved under this Act after the date of enactment of this subparagraph unless— 104 STAT. 3799 “(I) any household whose food assistance is issued in a form other than coupons has its allotment increased to the extent necessary to compensate for any State or local sales tax that may be collected in all or part of the area covered by the demonstration project, the tax on purchases of food by any such household is waived, or the Secretary determines on the basis of information provided by the State agency that the increase is unnecessary on the basis of the limited nature of the items subject to the State or local sales tax; and “(II) the State agency conducting the demonstration project pays the cost of any increased allotments. “(ii) Clause (i) shall not apply if a waiver or demonstration project already provides a household with assistance that exceeds that which the household would otherwise be eligible to receive by more than the estimated amount of any sales tax on the purchases of food that would be collected from the household in the project area in which the household resides.”.