# Fresh Food Act: Plain Language Summary

This bill creates tax breaks for grocery stores that open in neighborhoods where fresh food is hard to find. The government will offer two main incentives to companies that build new grocery stores in these underserved areas: a tax credit for employees who work there, and a bigger tax credit based on how much fresh produce, meat, and dairy the store sells.

Here's how it works in practice. If you're a grocery store owner and you open a new store in a qualifying neighborhood—either one that's officially designated as underserved or a rural area—your employees get an extra $1,000 tax break for their employer. More importantly, you get a tax credit worth a percentage of what you spend buying fresh fruits, vegetables, meat, and dairy to stock your shelves. That percentage starts at 30 percent in your first two years of operation, then drops to 28 percent in year three and 26 percent in year four. If you source these products locally (within your state or within 100 miles of your store), you get an extra 5 percent bonus on top of that. The incentives only apply to stores opened between 2025 and 2030.

A neighborhood qualifies as underserved if at least 500 people or a third of residents live more than a mile away from a grocery store (or more than 10 miles in rural areas), the poverty rate is at least 20 percent, and median family income is below 80 percent of the state average. The bill essentially pays grocery companies to bring fresh food access to poor neighborhoods that currently lack it, betting that tax savings will make it financially worthwhile to operate stores in areas that might otherwise be unprofitable.

Fresh Food Act

Cohen, Steve

Fresh Food ActThis bill provides a new business tax credit for 2025-2030 to grocery stores in&nbsp;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.&nbsp;Under the bill, a grocery store in an&nbsp;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&nbsp;within the same state in which the store is located&nbsp;or&nbsp;within 100 miles of the store.Under the bill, the grocery store must be in an&nbsp;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&nbsp;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.&nbsp;