Grocery Affordability Act

Key Points

• The bill creates a 30% tax credit for businesses that build new grocery stores or renovate existing ones in food deserts, which are low-income neighborhoods where residents lack easy access to fresh, healthy food.
• To qualify, a store must earn at least 35% of its revenue from groceries like fresh produce, meat, seafood, dairy, deli products, and baked goods. This ensures the credit supports real grocery stores rather than convenience shops.
• Food deserts are defined as census tracts where at least 500 people or 33% of residents live more than 1 mile from a grocery store in cities, or more than 10 miles in rural areas, and the area has a poverty rate of at least 20% or low median family income.
• Each business can claim up to $500,000 in credits per year, and the store's tax basis is reduced by the credit amount. This cap spreads the benefit across many stores rather than concentrating it in a few large projects.
• The credit takes effect for tax years starting after December 31, 2026, meaning it would first apply in 2027. The Treasury Department and USDA will work together to determine which census tracts qualify as food deserts.