Supermarket Tax Credit for Underserved Areas Act

To amend the Internal Revenue Code of 1986 to provide tax incentives for the establishment of supermarkets in certain underserved areas. 1. Short title This Act may be cited as the Supermarket Tax Credit for Underserved Areas Act 2. Tax incentives for establishment of supermarkets in certain underserved areas (a) In general Subchapter Y of chapter 1 IV Tax incentives for supermarkets in underserved areas Sec. 1400V–1. Increased rehabilitation credit. Sec. 1400V–2. Increased work opportunity tax credit. Sec. 1400V–3. Credit for sales of fresh fruits and vegetables. Sec. 1400V–4. Definitions. 1400V–1. Increased rehabilitation credit (a) In general In the case of a qualified rehabilitated building (as defined in section 47) which is an underserved area supermarket, subsection (a) of section 47 shall be applied— (1) by substituting 12 percent 10 percent (2) by substituting 24 percent 20 percent (b) Underserved area supermarket For purposes of subsection (a), a qualified rehabilitated building shall be treated as meeting the requirements of subparagraphs (A), (B), (C), and (D) of section 1400V–4(a)(4) if it is reasonable to believe that such building will meet such requirements as of the close of the taxable year in which such building is placed in service. (c) Termination Subsection (a) shall only apply to buildings placed in service after December 31, 2021, and before January 1, 2025. 1400V–2. Increased work opportunity tax credit (a) In general In the case of an individual employed in the trade or business of operating a new underserved area supermarket, the limitation otherwise in effect under paragraph (3) of section 51(b) with respect to such individual shall be increased by $1,000. (b) Termination Subsection (a) shall only apply to wages paid in taxable years beginning after December 31, 2021, and before January 1, 2027. 1400V–3. Credit for sales of fresh fruits and vegetables (a) In general For purposes of section 38, the underserved area supermarket fruit and vegetable credit determined under this section for the taxable year is an amount equal to 15 percent of the gross receipts of the taxpayer from the retail sale of fresh fruits and vegetables in the trade or business of operating a new underserved area supermarket. (b) Termination Subsection (a) shall only apply to taxable years beginning after December 31, 2022, and before January 1, 2027. 1400V–4. Definitions For purposes of this part— (1) Underserved area supermarket The term underserved area supermarket (2) New underserved area supermarket The term new underserved area supermarket (A) is placed in service after December 31, 2021, and (B) was not a supermarket at any time during the 3-year period ending on the date such underserved area supermarket is placed in service. (3) Duration of status A supermarket shall not fail to be treated as an underserved area supermarket solely by reason of the area in which such supermarket is located ceasing to be an underserved area— (A) after December 31, 2021, or (B) in the case of a new underserved area supermarket, on or after the date such supermarket is placed in service. (4) Supermarket The term supermarket (A) not less than 12,000 square feet and not more than 80,000 square feet of such building is used for selling items at retail, (B) at least 25 percent of the square feet of such building which is used for selling items at retail is used for selling produce, meat, fish, deli, and dairy items, (C) gross sales of items sold at retail from such building exceed $2,000,000 annually, and (D) at least 25 percent of such gross sales are attributable to sales of produce, meat, fish, deli, and dairy items. (5) Underserved area (A) In general The term underserved area (i) not less than 500 people, or 33 percent of the population of such tract, reside— (I) in the case of a tract located within a metropolitan area, more than 1 mile from a supermarket, or (II) in the case of a tract not located within a metropolitan area, more than 10 miles from a supermarket, (ii) the poverty rate for such tract is at least 20 percent, or (iii) (I) in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80 percent of statewide median family income, or (II) in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the metropolitan area median family income. (B) Areas not within census tracts In the case of an area which is not tracted for population census tracts, the equivalent county divisions (as defined by the Bureau of the Census) shall be used for purposes of determinations of underserved areas under this paragraph. (C) Determination of underserved area For purposes of determining whether a population census tract qualifies as an underserved area for purposes of this section, the Secretary shall make such determinations in coordination with the Secretary of Agriculture in such manner as is determined appropriate, including use of the Food Access Research Atlas established by the Department of Agriculture. (D) Metropolitan area The term metropolitan area metropolitan statistical area . (b) Credit To be part of general business credit Section 38(b) of such Code is amended by striking plus , plus (34) the underserved area supermarket fruit and vegetable credit determined under section 1400V–3. . (c) Clerical amendment The table of parts for subchapter Y of chapter 1 of such Code is amended by adding at the end the following new item: Part IV. Tax incentives for supermarkets in underserved areas . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2021.

Summary: Supermarket Tax Credit for Underserved Areas Act This bill expands the tax credits that are available for the establishment of supermarkets in underserved areas. The bill includes provisions that (1) increase the rate of the rehabilitation tax credit for a supermarket building placed in service after December 31, 2021, and before January 1, 2025, in an underserved area; (2) increase by $1,000 the limit on wages eligible for the work opportunity tax credit for employees of a new underserved area supermarket; and (3) allow a business-related tax credit for 15% of the gross receipts from the retail sale of fresh fruits and vegetables in a new underserved area supermarket.