Fresh Food Act
This bill provides a new business tax credit for 2025-2030 to grocery stores in underserved areas for a percentage of the cost of fresh fruit, vegetables, meat, and dairy sold. The bill also increases the work opportunity tax credit (WOTC) for 2025-2030 for grocery stores in underserved areas that hire eligible employees.
Under the bill, a grocery store in an underserved area may claim a tax credit of between 26% and 30% of the cost of fresh fruits, vegetables, meat, and dairy sold, depending on when the grocery store is placed in service and when the grocery store’s location is deemed to be in an underserved area. The percentage is increased by 5% for any fresh fruits, vegetables, meat, or dairy sourced from a location that is within the same state in which the store is located or within 100 miles of the store.
Under the bill, the grocery store must be in an underserved or rural area; have no more than 80,000 square feet of retail space; allocate at least 25% of the retail space for the sale of fresh fruit, vegetables, meat, and dairy; and have at least 25% of sales attributable to fresh fruit, vegetables, meat, and dairy.
Finally, the bill increases the WOTC for grocery stores in underserved areas by increasing the amount of qualifying wages paid to an eligible employee that may be used in the calculation of the tax credit. Under current law, the WOTC is calculated as a percentage of qualified wages paid to an eligible employee.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9914 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 9914
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the establishment of grocery stores in certain underserved areas.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 4, 2024
Mr. Cohen introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the establishment of grocery stores in certain underserved areas.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fresh Food Act''.
SEC. 2. TAX INCENTIVES FOR ESTABLISHMENT OF GROCERY STORES IN CERTAIN
UNDERSERVED AREAS.
(a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after subchapter V the following new subchapter:
``Subchapter W--Tax Incentives for Grocery Stores in Underserved Areas
``Sec. 1400. Increased work opportunity tax credit.
``Sec. 1400A. Credit for sales of fresh fruits, vegetables, meat, and
dairy.
``Sec. 1400B. Definitions.
``SEC. 1400. INCREASED WORK OPPORTUNITY TAX CREDIT.
``(a) In General.--In the case of an individual employed in the
trade or business of operating a new underserved area grocery store (as
certified by the designated local agency (as defined in section
51(d)(12)), the limitation otherwise in effect under section 51(b)(3)
with respect to such individual shall be increased by $1,000.
``(b) Alternative Certification.--The Secretary may provide for
alternative methods for certification of an individual described in
subsection (a) in such manner as the Secretary (in coordination with
the head of any relevant Federal agency) determines appropriate.
``(c) Termination.--Subsection (a) shall only apply to wages paid
in taxable years beginning after December 31, 2024, and before January
1, 2031.
``SEC. 1400A. CREDIT FOR SALES OF FRESH FRUITS, VEGETABLES, MEAT, AND
DAIRY.
``(a) In General.--For purposes of section 38, the underserved area
grocery store fruits, vegetables, meat, and dairy credit determined
under this section for the taxable year is an amount equal to the
applicable percentage of the cost of goods sold by the taxpayer with
respect to the retail sale of fresh fruits, vegetables, meat, and dairy
in the trade or business of operating a new underserved area grocery
store.
``(b) Cost of Goods Sold.--For purposes of subsection (a), the cost
of goods sold with respect to any taxable year is the total amount (as
determined under the method of accounting of the taxpayer) of purchases
made by the taxpayer for goods acquired for resale and sold during such
taxable year.
``(c) Applicable Percentage.--
``(1) In general.--For purposes of subsection (a), the
applicable percentage shall be--
``(A) in the case of any new underserved area
grocery store which is placed in service during a
taxable year which includes the date on which the
Secretary determines (pursuant to section 1400B(4)(C))
that the area in which such grocery store is located
qualifies as an underserved area, or which is placed in
service during a taxable year beginning after such
date--
``(i) with respect to the taxable year in
which such grocery store is placed in service,
30 percent,
``(ii) with respect to the taxable year
subsequent to the taxable year described in
clause (i), 30 percent,
``(iii) with respect to the taxable year
subsequent to the taxable year described in
clause (ii), 28 percent,
``(iv) with respect to the taxable year
subsequent to the taxable year described in
clause (iii), 26 percent, and
``(v) with respect to any taxable year
subsequent to the taxable year described in
clause (iv), 0 percent, or
``(B) in the case of any new underserved area
grocery store which was placed in service during a
taxable year which ended prior to the date on which the
Secretary determines (pursuant to section 1400B(4)(C))
that the area in which such grocery store is located
qualifies as an underserved area--
``(i) with respect to the taxable year
which includes such date, 30 percent,
``(ii) with respect to the taxable year
subsequent to the taxable year described in
clause (i), 28 percent,
``(iii) with respect to the taxable year
subsequent to the taxable year described in
clause (ii), 26 percent, and
``(iv) with respect to any taxable year
subsequent to the taxable year described in
clause (iii), 0 percent.
``(2) Bonus for locally sourced fruits, vegetables, meat,
and dairy.--For purposes of subsection (a), in the case of any
taxable year described in paragraph (1) (with the exception of
any taxable year described in subparagraph (A)(v) or (B)(iv) of
such paragraph), the applicable percentage for such taxable
year shall be increased by 5 percentage points with respect to
any fresh fruits, vegetables, meat, and dairy which are
sourced--
``(A) from any location within the same State in
which the new underserved area grocery store is
located, or
``(B) from any location which is within a 100-mile
radius of the new underserved area grocery store.
``(d) Termination.--Subsection (a) shall only apply to taxable
years beginning after December 31, 2024, and before January 1, 2031.
``SEC. 1400B. DEFINITIONS.
``For purposes of this subchapter--
``(1) Fresh fruits, vegetables, meat, and dairy.--
``(A) In general.--Subject to subparagraph (B), the
term `fresh fruits, vegetables, meat, and dairy' means
any product of agriculture (as defined in section 3 of
the Fair Labor Standards Act of 1938 (29 U.S.C.
203(f))) which is suitable for human consumption.
``(B) Exclusion of canned or frozen foods.--The
term `fresh fruits, vegetables, meat, and dairy' shall
not include any product described in subparagraph (A)
which is canned or frozen.
``(2) Grocery store.--
``(A) In general.--The term `grocery store' means
any building if--
``(i) not more than 80,000 square feet of
such building is used for selling items at
retail,
``(ii) at least 25 percent of the square
feet of such building which is used for selling
items at retail is used for selling fresh
fruits, vegetables, meat, and dairy, and
``(iii) at least 25 percent of the gross
sales of items sold at retail from such
building are attributable to sales of fresh
fruits, vegetables, meat, and dairy.
``(B) Malls and shopping centers.--
``(i) In general.--For purposes of
subparagraph (A), the term `building' includes
any portion of a larger building or structure
(such as a mall or shopping center)--
``(I) which is owned, leased, or
occupied by the taxpayer, and
``(II) in which the taxpayer, as
part of its trade or business, makes
retail sales of fresh fruits,
vegetables, meat, and dairy.
``(ii) Application of requirements.--In the
case of any portion of a larger building or
structure described in clause (i), the
requirements under subparagraph (A) shall be
applied solely with respect to such portion and
not with respect to the larger building or
structure described in such clause.
``(3) New underserved area grocery store.--
``(A) In general.--The term `new underserved area
grocery store' means any grocery store of the taxpayer
which is located in--
``(i) an underserved area (as determined by
the Secretary under paragraph (4)(C) after
December 31, 2024), or
``(ii) a rural area (as defined in section
343(a)(13)(A) of the Consolidated Farm and
Rural Development Act (7 U.S.C.
1991(a)(13)(A)).
``(B) Duration of status.--
``(i) Underserved area.--In the case of any
grocery store which is in operation during a
period in which the Secretary has determined
(pursuant to paragraph (4)(C)) that the area in
which such grocery store is located qualifies
as an underserved area, such grocery store
shall not fail to satisfy the requirement
described in subparagraph (A) solely by reason
of the area in which such grocery store is
located subsequently ceasing to be an
underserved area.
``(ii) Rural area.--In the case of any
grocery store which is in operation during a
period in which a determination is made after
December 31, 2024, that the area in which such
grocery store is located qualifies as a rural
area, such grocery store shall not fail to
satisfy the requirement described in
subparagraph (A) solely by reason of the area
in which such grocery store is located
subsequently ceasing to be a rural area.
``(4) Underserved area.--
``(A) In general.--The term `underserved area'
means any population census tract in which--
``(i) not less than 500 people, or 33
percent of the population of such tract,
reside--
``(I) in the case of a tract
located within a metropolitan area,
more than 1 mile from a grocery store,
or
``(II) in the case of a tract not
located within a metropolitan area,
more than 10 miles from a grocery
store,
``(ii) the poverty rate for such tract is
at least 20 percent, and
``(iii)(I) in the case of a tract not
located within a metropolitan area, the median
family income for such tract does not exceed 80
percent of statewide median family income, or
``(II) in the case of a tract located
within a metropolitan area, the median family
income for such tract does not exceed 80
percent of the greater of statewide median
family income or the metropolitan area median
family income.
``(B) Areas not within census tracts.--In the case
of an area which is not tracted for population census
tracts, the equivalent county divisions (as defined by
the Bureau of the Census) shall be used for purposes of
determinations of underserved areas under this
paragraph.
``(C) Determination of underserved area.--For
purposes of determining whether a population census
tract qualifies as an underserved area for purposes of
this paragraph, the Secretary shall make such
determinations in coordination with the Secretary of
Agriculture in such manner as is determined
appropriate, including use of the Food Access Research
Atlas established by the Department of Agriculture.
``(D) Metropolitan area.--The term `metropolitan
area' has the same meaning given the term `metropolitan
statistical area' under section 143(k)(2)(B).''.
(b) Credit To Be Part of General Business Credit.--
(1) In general.--Section 38(b) of the Internal Revenue Code
of 1986 is amended by striking ``plus'' at the end of paragraph
(40), by striking the period at the end of paragraph (41) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(42) the underserved area grocery store fruits,
vegetables, meat, and dairy credit determined under section
1400A.''.
(2) Specified credits.--Section 38(c)(4)(B) of such Code is
amended--
(A) in clause (xi), by striking ``and'' at the end,
(B) in clause (xii), by striking the period at the
end and inserting ``, and'', and
(C) by adding at the end the following:
``(xiii) the credit determined under
section 1400A.''.
(c) Clerical Amendment.--The table of subchapters for chapter 1 of
the Internal Revenue Code of 1986 is amended by inserting after the
item relating to subchapter V the following new item:
``subchapter w. tax incentives for grocery stores in underserved
areas''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line