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.

1/24/2025, 9:21 AM

Summary of Bill HR 701

Bill 119 HR 701, also known as the Small Food Retailer Incentive Act, aims to amend the Internal Revenue Code of 1986 in order 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. The bill is designed to address the issue of food deserts, which are areas where residents have limited access to affordable and nutritious food options.

Under this legislation, small food retail businesses that meet certain criteria, such as being located in a designated food desert area and having a certain percentage of their sales come from fresh produce and other healthy food options, would be eligible for tax incentives. These incentives could include tax credits, deductions, or other benefits to help offset the costs of starting and operating a small food retail business in these underserved areas.

The goal of the Small Food Retailer Incentive Act is to encourage the establishment of more small food retail businesses in areas where access to healthy food options is limited, ultimately improving the overall health and well-being of residents in these communities. By providing tax incentives to small food retailers, the bill aims to increase competition in these areas, drive down prices, and increase access to nutritious food options for residents who may otherwise have limited choices. Overall, Bill 119 HR 701 seeks to address the issue of food deserts by incentivizing the establishment and operation of small food retail businesses in underserved areas, ultimately improving access to healthy food options for residents in these communities.

Congressional Summary of HR 701

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 Status of Bill HR 701

Bill HR 701 is currently in the status of Bill Introduced since January 23, 2025. Bill HR 701 was introduced during Congress 119 and was introduced to the House on January 23, 2025. Bill HR 701's most recent activity was Referred to the House Committee on Ways and Means. as of January 23, 2025

Bipartisan Support of Bill HR 701

Total Number of Sponsors

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Republican Sponsors

Unaffiliated Sponsors

Total Number of Cosponsors

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Unaffiliated Cosponsors

Policy Area and Potential Impact of Bill HR 701

Primary Policy Focus

Alternate Title(s) of Bill HR 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.