Supermarket Tax Credit Bill Aimed to Combat Food Deserts

Congressman Steve Cohen, D-Memphis, introduced the Supermarket Tax Credit for Underserved Areas Act, a bill to provide tax incentives for the establishment of grocery stores in urban and rural areas that don’t have convenient access to fresh food, best known as food deserts.

The bill, introduced in the U.S. House on Wednesday, would also increase the work employment tax credit to encourage hiring of disadvantaged youth, community residents and veterans. It would also provide a credit for sales of locally grown fresh fruits and vegetables.

“For more than 23 million Americans living in communities such as parts of Memphis that lack access to fresh food and vegetables, a food desert is not a mirage but a reality. A lack of healthy food choices can contribute to a decline in health and well-being and may contribute to diet-related illnesses, like diabetes. My bill addresses this problem by increasing the rehabilitation tax credit for supermarkets in urban and rural areas,” Cohen said in a news release.

Representatives Yvette Clarke of New York, Raul Grijalva or Arizona, Jamie Raskin of Maryland; Barbara Lee and Ro Khanna of California; Eleanor Holmes Norton of Washington, D.C.; and Robin Kelly, Bobby Rush and Jan Schakowsky of Illinois, are original co-sponsors of the measure.

Last March, a group of senators led by U.S. Senator Mark Warner, D-Virginia, reintroduced a bipartisan bill to eliminate food deserts.

The Healthy Food Access for All Americans (HFAAA) Act would benefit low-income rural and urban communities that have limited or no access to nutritious food by providing incentives to food service providers such as grocers, retailers, and nonprofits who expand access to nutritious foods in underserved communities.

“Locally owned, independent grocers are the bedrock of their communities, spurring economic growth and providing access to healthy and affordable food choices. On behalf of our members, the National Grocers Association applauds Senator Warner for his efforts to work towards a solution that tackles the barriers to entry faced by grocers in rural and urban communities that are without a supermarket. We look forward to working with Congress on a bipartisan basis to move this important piece of legislation forward,” said Greg Ferrara, Executive Vice President of the National Grocers Association.

The Virginia Pilot Newspaper published on June 2nd a column wrote by Senator Warner, about food deserts and why Congress must act in this matter.

“Urban food deserts are often found in lower-income communities and communities of color. Individuals who live in these communities with low access to healthy food options are at higher risk for obesity, diabetes and heart disease,” wrote Senator Warner.  

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The HFAAA Act, which defines a grocery market as a retail sales store with at least 35 percent of its selection (or forecasted selection) dedicated to selling fresh produce, poultry, dairy, and deli items, would spark investment in food deserts across the country that have a poverty rate of 20 percent or higher, or a median family income of less than 80 percent of the median for the state or metro area.

It would grant tax credits or grants to food providers who service low-access communities and attain a “Special Access Food Provider” (SAFP) certification through the Treasury Department. Incentives would be awarded based on the following structure:

  • New Store Construction – Companies that construct new grocery stores in a food desert will receive a onetime 15 percent tax credit after receiving certification.
  • Retrofitting Existing Structures – Companies that make retrofits to an existing store’s healthy food sections can receive a onetime 10 percent tax credit after the repairs certify the store as an SAFP.
  • Food Banks  Certified food banks that build new (permanent) structures in food deserts will be eligible to receive a onetime grant for 15 percent of their construction costs.
  • Temporary Access Merchants  Certified temporary access merchants (i.e. mobile markets, farmers markets, and some food banks) that are 501(c)(3)s will receive grants for 10 percent of their annual operating costs.

“I don’t think it’s right that, in the richest country in the world, a person’s zip code should be a sentence to a lifetime of poor nutrition and the health problems that go with it,” stressed Warner in his column about food deserts.