Supermarket Tax Credit for Underserved Areas Act
Bill: H.R.4687 | Sponsor: Rep. Cohen, Steve (D-TN)
Policy area: Taxation

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.

To amend the Internal Revenue Code of 1986 to provide tax incentives 
  for the establishment of supermarkets in certain underserved areas.

    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 ``Supermarket Tax Credit for 
Underserved Areas Act''.

SEC. 2. TAX INCENTIVES FOR ESTABLISHMENT OF SUPERMARKETS IN CERTAIN 
              UNDERSERVED AREAS.

    (a) In General.--Subchapter Y of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

    ``PART 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.

``SEC. 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' for `10 percent' in 
        paragraph (1), and
            ``(2) by substituting `24 percent' for `20 percent' in 
        paragraph (2).
    ``(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.

``SEC. 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.

``SEC. 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.

``SEC. 1400V-4. DEFINITIONS.

    ``For purposes of this part--
            ``(1) Underserved area supermarket.--The term `underserved 
        area supermarket' means any supermarket of the taxpayer located 
        in an underserved area.
            ``(2) New underserved area supermarket.--The term `new 
        underserved area supermarket' means any underserved area 
        supermarket which--
                    ``(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' means any 
        building if--
                    ``(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' 
                means any population census tract in which--
                            ``(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' has the same meaning given the term `metropolitan 
                statistical area' under section 143(k)(2)(B).''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of 
such Code is amended by striking ``plus'' at the end of paragraph (32), 
by striking the period at the end of paragraph (33) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(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.
                                 <all>