Texas Senate Bill SB2294

Texas 2025 - 89th Regular

• Filed: 3/11/25

Caption

Relating to a franchise tax credit for entities that establish a grocery store or healthy corner store in a food desert.

Impact

The bill would amend Chapter 171 of the Texas Tax Code by adding Subchapter N, which specifically outlines the criteria for entities to qualify for the tax credit. It establishes a framework that allows taxable entities to claim a credit equal to five percent of their expenditures related to the establishment of a grocery store or healthy corner store. This financial incentive could significantly encourage businesses to invest in underserved communities, potentially enhancing local economies and providing healthier food choices to residents. However, the credit is limited to expenses related to land acquisition, construction, and store furnishing, excluding inventory costs.

Summary

SB2294 aims to provide a franchise tax credit for entities that establish grocery stores or healthy corner stores in food deserts. Defined as areas with limited access to healthy food retailers, food deserts are prevalent in low-income or high-poverty regions. The bill intends to incentivize the opening of grocery outlets that can serve these communities, thereby improving access to nutritious food options and addressing public health issues associated with food insecurity. Eligible entities must open their stores by January 1, 2026, and accept benefits from nutrition assistance programs within 90 days of opening.

Contention

There are potential points of contention surrounding SB2294, especially regarding the definition of ‘food desert’ and the effectiveness of tax incentives in driving meaningful change in food access. Critics may argue about the adequacy of the credit amount and whether it would sufficiently offset the initial costs of establishing a store in a challenging economic environment. Additionally, there may be discussions regarding regulatory oversight to ensure that the intended benefits of the program are realized in the communities it aims to serve. Overall, stakeholders must weigh the benefits of increased food access against the fiscal implications of the proposed tax credits.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 171. Franchise Tax
  • Section: New Section