H.R. 9378: Grocery Affordability Act

This bill would create a new federal tax credit for grocery stores built or renovated in areas the bill defines as food deserts—places where many residents live a long distance from a grocery store and where poverty or low income levels are relatively high.

What the tax credit would do

The bill would let a business claim a credit equal to 30% of certain costs if it:

• builds a new qualifying grocery store in a food desert, or
• renovates part of an existing grocery store in a food desert.

The credit would apply to costs for the store itself and certain property used to operate it, as well as qualified renovation expenses.

Limits and rules

• The credit would be capped at $500,000 per taxpayer per year.
• If a business claims the credit, the tax basis of the store or renovated area would be reduced by the amount of the credit. In general, this means the business could not also receive the full tax benefit from depreciating the same costs.
• Only stores that are primarily grocery stores would qualify. The bill defines a grocery store as one where forecasted grocery sales are at least 35% of total annual sales.
• The bill defines “groceries” to include fresh and frozen produce, meat and seafood, dairy products, deli items, and baked goods.

What counts as a food desert

Under the bill, a census tract would generally count as a food desert if:

• at least 500 people or 33% of residents live more than 1 mile from a grocery store in a metropolitan area, or more than 10 miles away in a non-metropolitan area; and
• the area also meets one of the following conditions:
  • the poverty rate is at least 20%, or
  • median family income is at or below 80% of the relevant area median income.

If an area is not divided into census tracts, the bill says comparable county divisions would be used instead. The Treasury Department, working with the Department of Agriculture, would determine which areas qualify, and could use USDA’s Food Access Research Atlas.

Administration and timing

The Treasury Secretary, in consultation with the Secretary of Agriculture, would issue regulations or guidance to implement the credit. The change would apply to taxable years beginning after December 31, 2026.

Relevant Companies

None found