Bill Details
HR.701 - 119th Congress
Status
Latest action
2025-01-23 - Referred to the House Committee on Ways and Means.
Introduced Date
2025-01-23
Policy Area
Taxation
Committees
View committees (1)
Cosponsors
View cosponsors (2)
7
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would give tax breaks to small food retail businesses, such as grocery stores, produce markets, and similar shops, when they operate in areas where there is little competition in the food retail market. The goal is to make it easier for new and existing local food stores to open, expand, hire workers, and invest in buildings and equipment. The bill raises several existing tax benefits and also creates a new tax credit for newer food retail businesses that make business investments. In simple terms, it is meant to encourage more food stores in underserved areas and help lower food prices through stronger competition.
- It increases the tax credit for fixing up an old building for use by a qualifying small food retail business from 20% to 25%.
- It raises the work opportunity tax credit limits for these businesses, which gives employers a larger tax benefit for hiring certain workers.
- It increases bonus depreciation for qualifying property, and for some fruit- and nut-bearing plants, so businesses can write off more of these costs faster.
- It creates a new credit equal to 15% of qualifying investment costs for a new small food retail business that started within the past three years.
Official Summaries
Restoring Establishment Deductions and Uplifting Competition to Ease Food Prices Act or the REDUCE Food Prices Act
This bill establishes a new tax credit for certain food retail businesses. The bill also increases bonus depreciation, the qualified business income (QBI) tax deduction, the rehabilitation tax credit (also known as the historic preservation tax credit), and the work opportunity tax credit (WOTC) for the businesses.
The bill establishes a new tax credit (as part of the general business tax credit) in the amount of 15% of certain capital investments by a qualified small food retail business in the first three years of operation.
The bill defines a qualified small food retail business as a private or closely-held company, a partnership, or a sole proprietorship (1) with annual average gross receipts of $200 million or less for the three tax years preceding the current tax year, (2) with at least 70% of its annual average gross receipts attributable to the retail sale of food or produce, and (3) located in a low-competition area.
The bill also increases
- bonus depreciation percentages for certain property placed into service by a qualified small food retail business,
- the QBI tax deduction for qualified small food retail business,
- the rehabilitation tax credit for qualified rehabilitation expenses incurred by a qualified small food retail business, and
- the WOTC for wages paid by a qualified small food retail business to eligible workers.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 701 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 701
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the establishment and operation of small food retail businesses in
areas with high food retail concentration and low levels of
competition.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 23, 2025
Ms. Sherrill (for herself and Mrs. Hayes) 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 and operation of small food retail businesses in
areas with high food retail concentration and low levels of
competition.
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 ``Restoring Establishment Deductions
and Uplifting Competition to Ease Food Prices Act'' or the ``REDUCE
Food Prices Act''.
SEC. 2. INCREASED REHABILITATION TAX CREDIT FOR QUALIFIED SMALL FOOD
RETAIL BUSINESSES.
(a) In General.--Section 47 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
``(e) Special Rule for Qualified Small Food Retail Businesses.--
``(1) In general.--In the case of a qualified rehabilitated
building placed in service by a qualified small food retail
business, subsection (a)(2) shall be applied by substituting
`25 percent' for `20 percent'.
``(2) Qualified small food retail business defined.--
``(A) In general.--For purposes of paragraph (1),
the term `qualified small food retail business' means a
business--
``(i) which is described in section
38(c)(5) (determined by applying `$200,000,000'
for `$50,000,000' in such section),
``(ii) at least 70 percent of the annual
average gross receipts of which are
attributable to the retail sale of food or
produce, and
``(iii) which is located in a low-
competition area.
``(B) Low-competition area.--For purposes of
subparagraph (A), the term `low-competition area' means
a county with respect to which the Herfindahl-Hirschman
Index for the retail food sector, as measured by the
Economic Research Service of the United States
Department of Agriculture, is at or above a level of
1,400.''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after the date of the enactment of this
Act.
SEC. 3. INCREASED WORK OPPORTUNITY TAX CREDIT FOR QUALIFIED SMALL FOOD
RETAIL BUSINESSES.
(a) In General.--Section 51(b)(3) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``The amount'' and inserting
``(A) In general.--The amount'', and
(2) by adding at the end the following new subparagraph:
``(B) Increased limitation for qualified small food
retail businesses.--In the case of wages paid by an
employer that is a qualified small food retail business
(as defined in section 47(e)(2)(A)), subparagraph (A)
shall be applied--
``(i) by substituting `$8,000' for
`$6,000',
``(ii) by substituting `$14,000' for
`$12,000',
``(iii) by substituting `$16,000' for
`$14,000', and
``(iv) by substituting `$26,000' for
`$24,000'.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 4. INCREASED BONUS DEPRECIATION FOR QUALIFIED SMALL FOOD RETAIL
BUSINESSES.
(a) In General.--Section 168(k) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(10) Special rule for qualified small food retail
businesses.--
``(A) Increased applicable percentage for property
placed in service by qualified small food retail
businesses.--In the case of property placed in service
by a taxpayer that is a qualified small food retail
business (as defined in section 47(e)(2)(A)), paragraph
(6) shall be applied--
``(i) in subparagraph (A)--
``(I) by substituting `70 percent'
for `60 percent' each place it appears,
``(II) by substituting `50 percent'
for `40 percent' each place it appears,
and
``(III) by substituting `30
percent' for `20 percent' each place it
appears, and
``(ii) in subparagraph (B)--
``(I) by substituting `70 percent'
for `60 percent' each place it appears,
``(II) by substituting `50 percent'
for `40 percent' each place it appears,
and
``(III) by substituting `30
percent' for `20 percent' each place it
appears.
``(B) Increased applicable percentage for plants
bearing fruits and nuts planted or grafted by qualified
small food retail businesses.--In the case of plants
bearing fruits and nuts planted or grafted by a
taxpayer that is a qualified small food retail business
(as defined in section 47(e)(2)(A)), paragraph (6)(C)
shall be applied--
``(i) by substituting `70 percent' for `60
percent' each place it appears,
``(ii) by substituting `50 percent' for `40
percent' each place it appears, and
``(iii) by substituting `30 percent' for
`20 percent' each place it appears.''.
(b) Effective Date.--The amendments made by this section shall
apply to property placed in service, or plants planted or grafted,
after the date of the enactment of this Act.
SEC. 5. INCREASED QUALIFIED BUSINESS INCOME DEDUCTION FOR QUALIFIED
SMALL FOOD RETAIL BUSINESSES.
(a) In General.--Section 199A of the Internal Revenue Code of 1986
is amended by redesignating subsection (i) as subsection (j) and by
inserting after subsection (h) the following new subsection:
``(i) Special Rule for Qualified Small Food Retail Businesses.--In
the case of a qualified small food retail business (as defined in
section 47(e)(2)(A)), subsection (a)(2) shall be applied by
substituting `25 percent' for `20 percent'.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 6. NEW FOOD RETAIL BUSINESS TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 45BB. NEW FOOD RETAIL BUSINESS CREDIT.
``(a) In General.--For purposes of section 38, in the case of a new
small food retail business, the new food retail business credit under
this section for the taxable year is an amount equal to 15 percent of
qualified investment amounts paid or incurred during the taxable year.
``(b) Definitions.--For purposes of this section--
``(1) New food retail business.--The term `new food retail
business' means a qualified small food retail business (as
defined in section 47(e)(2)(A)) which began operations during
the previous three taxable years.
``(2) Qualified investment amounts.--The term `qualified
investment amounts' means amounts paid for capital investment
in the property, facilities, or equipment of a business
premises used for retail sales of the new food retail
business.''.
(b) Credit Part of General Business Credit.--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 new food retail business credit determined under
section 45BB(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 45BB. New food retail business credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
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