REDUCE Food Prices Act
REDUCE Food Prices Act
Plain Language Summary
# REDUCE Food Prices Act Summary **What the Bill Would Do:** The REDUCE Food Prices Act aims to lower food costs by offering tax breaks to smaller grocery stores and food retailers. The bill would create a new 15% tax credit for qualifying small food retailers that invest in new equipment or improvements during their first three years of operation. It would also expand existing tax benefits for these businesses, including deductions for equipment purchases, tax credits for hiring workers, and credits for restoring historic buildings used as food retailers. **Who It Affects:** The bill specifically targets small and mid-sized food retail businesses—like independent grocery stores, local markets, and food retailers—with annual revenues under $200 million that get at least 70% of their income from selling food.
The theory behind the bill is that by reducing costs for these retailers through tax breaks, they can lower prices for consumers buying groceries. **Current Status:** The bill (HR 701) was introduced by Representative Mikie Sherrill (D-NJ) in the 119th Congress and is currently under review in committee. It has not yet been voted on by the full House.
CRS Official Summary
Restoring Establishment Deductions and Uplifting Competition to Ease Food Prices Act or the REDUCE Food Prices ActThis 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 increasesbonus 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, andthe WOTC for wages paid by a qualified small food retail business to eligible workers.
Latest Action
Referred to the House Committee on Ways and Means.