I
119THCONGRESS
1
STSESSION H. R. 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.
IN THE HOUSE OF REPRESENTATIVES
JANUARY23, 2025
Ms. S
HERRILL(for herself and Mrs. HAYES) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
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.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Restoring Establish-4
ment Deductions and Uplifting Competition to Ease Food 5
Prices Act’’ or the ‘‘REDUCE Food Prices Act’’. 6
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SEC. 2. INCREASED REHABILITATION TAX CREDIT FOR 1
QUALIFIED SMALL FOOD RETAIL BUSI-2
NESSES. 3
(a) I
NGENERAL.—Section 47 of the Internal Rev-4
enue Code of 1986 is amended by adding at the end the 5
following new subsection: 6
‘‘(e) S
PECIALRULE FORQUALIFIEDSMALLFOOD 7
R
ETAILBUSINESSES.— 8
‘‘(1) I
N GENERAL.—In the case of a qualified 9
rehabilitated building placed in service by a qualified 10
small food retail business, subsection (a)(2) shall be 11
applied by substituting ‘25 percent’ for ‘20 percent’. 12
‘‘(2) Q
UALIFIED SMALL FOOD RETAIL BUSI -13
NESS DEFINED.— 14
‘‘(A) I
N GENERAL.—For purposes of para-15
graph (1), the term ‘qualified small food retail 16
business’ means a business— 17
‘‘(i) which is described in section 18
38(c)(5) (determined by applying 19
‘$200,000,000’ for ‘$50,000,000’ in such 20
section), 21
‘‘(ii) at least 70 percent of the annual 22
average gross receipts of which are attrib-23
utable to the retail sale of food or produce, 24
and 25
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‘‘(iii) which is located in a low-com-1
petition area. 2
‘‘(B) L
OW-COMPETITION AREA.—For pur-3
poses of subparagraph (A), the term ‘low-com-4
petition area’ means a county with respect to 5
which the Herfindahl-Hirschman Index for the 6
retail food sector, as measured by the Economic 7
Research Service of the United States Depart-8
ment of Agriculture, is at or above a level of 9
1,400.’’. 10
(b) E
FFECTIVEDATE.—The amendment made by 11
this section shall apply to property placed in service after 12
the date of the enactment of this Act. 13
SEC. 3. INCREASED WORK OPPORTUNITY TAX CREDIT FOR 14
QUALIFIED SMALL FOOD RETAIL BUSI-15
NESSES. 16
(a) I
NGENERAL.—Section 51(b)(3) of the Internal 17
Revenue Code of 1986 is amended— 18
(1) by striking ‘‘The amount’’ and inserting 19
‘‘(A) I
N GENERAL.—The amount’’, and 20
(2) by adding at the end the following new sub-21
paragraph: 22
‘‘(B) I
NCREASED LIMITATION FOR QUALI -23
FIED SMALL FOOD RETAIL BUSINESSES .—In 24
the case of wages paid by an employer that is 25
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a qualified small food retail business (as defined 1
in section 47(e)(2)(A)), subparagraph (A) shall 2
be applied— 3
‘‘(i) by substituting ‘$8,000’ for 4
‘$6,000’, 5
‘‘(ii) by substituting ‘$14,000’ for 6
‘$12,000’, 7
‘‘(iii) by substituting ‘$16,000’ for 8
‘$14,000’, and 9
‘‘(iv) by substituting ‘$26,000’ for 10
‘$24,000’.’’. 11
(b) E
FFECTIVEDATE.—The amendments made by 12
this section shall apply to taxable years beginning after 13
the date of the enactment of this Act. 14
SEC. 4. INCREASED BONUS DEPRECIATION FOR QUALIFIED 15
SMALL FOOD RETAIL BUSINESSES. 16
(a) I
NGENERAL.—Section 168(k) of the Internal 17
Revenue Code of 1986 is amended by adding at the end 18
the following new paragraph: 19
‘‘(10) S
PECIAL RULE FOR QUALIFIED SMALL 20
FOOD RETAIL BUSINESSES .— 21
‘‘(A) I
NCREASED APPLICABLE PERCENT -22
AGE FOR PROPERTY PLACED IN SERVICE BY 23
QUALIFIED SMALL FOOD RETAIL BUSI -24
NESSES.—In the case of property placed in 25
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service by a taxpayer that is a qualified small 1
food retail business (as defined in section 2
47(e)(2)(A)), paragraph (6) shall be applied— 3
‘‘(i) in subparagraph (A)— 4
‘‘(I) by substituting ‘70 percent’ 5
for ‘60 percent’ each place it appears, 6
‘‘(II) by substituting ‘50 percent’ 7
for ‘40 percent’ each place it appears, 8
and 9
‘‘(III) by substituting ‘30 per-10
cent’ for ‘20 percent’ each place it ap-11
pears, and 12
‘‘(ii) in subparagraph (B)— 13
‘‘(I) by substituting ‘70 percent’ 14
for ‘60 percent’ each place it appears, 15
‘‘(II) by substituting ‘50 percent’ 16
for ‘40 percent’ each place it appears, 17
and 18
‘‘(III) by substituting ‘30 per-19
cent’ for ‘20 percent’ each place it ap-20
pears. 21
‘‘(B) I
NCREASED APPLICABLE PERCENT -22
AGE FOR PLANTS BEARING FRUITS AND NUTS 23
PLANTED OR GRAFTED BY QUALIFIED SMALL 24
FOOD RETAIL BUSINESSES .—In the case of 25
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plants bearing fruits and nuts planted or graft-1
ed by a taxpayer that is a qualified small food 2
retail business (as defined in section 3
47(e)(2)(A)), paragraph (6)(C) shall be ap-4
plied— 5
‘‘(i) by substituting ‘70 percent’ for 6
‘60 percent’ each place it appears, 7
‘‘(ii) by substituting ‘50 percent’ for 8
‘40 percent’ each place it appears, and 9
‘‘(iii) by substituting ‘30 percent’ for 10
‘20 percent’ each place it appears.’’. 11
(b) E
FFECTIVEDATE.—The amendments made by 12
this section shall apply to property placed in service, or 13
plants planted or grafted, after the date of the enactment 14
of this Act. 15
SEC. 5. INCREASED QUALIFIED BUSINESS INCOME DEDUC-16
TION FOR QUALIFIED SMALL FOOD RETAIL 17
BUSINESSES. 18
(a) I
NGENERAL.—Section 199A of the Internal Rev-19
enue Code of 1986 is amended by redesignating subsection 20
(i) as subsection (j) and by inserting after subsection (h) 21
the following new subsection: 22
‘‘(i) S
PECIALRULE FORQUALIFIEDSMALLFOOD 23
R
ETAILBUSINESSES.—In the case of a qualified small 24
food retail business (as defined in section 47(e)(2)(A)), 25
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subsection (a)(2) shall be applied by substituting ‘25 per-1
cent’ for ‘20 percent’.’’. 2
(b) E
FFECTIVEDATE.—The amendments made by 3
this section shall apply to taxable years beginning after 4
the date of the enactment of this Act. 5
SEC. 6. NEW FOOD RETAIL BUSINESS TAX CREDIT. 6
(a) I
NGENERAL.—Subpart D of part IV of sub-7
chapter A of chapter 1 of the Internal Revenue Code of 8
1986 is amended by adding at the end the following new 9
section: 10
‘‘SEC. 45BB. NEW FOOD RETAIL BUSINESS CREDIT. 11
‘‘(a) I
NGENERAL.—For purposes of section 38, in 12
the case of a new small food retail business, the new food 13
retail business credit under this section for the taxable 14
year is an amount equal to 15 percent of qualified invest-15
ment amounts paid or incurred during the taxable year. 16
‘‘(b) D
EFINITIONS.—For purposes of this section— 17
‘‘(1) N
EW FOOD RETAIL BUSINESS .—The term 18
‘new food retail business’ means a qualified small 19
food retail business (as defined in section 20
47(e)(2)(A)) which began operations during the pre-21
vious three taxable years. 22
‘‘(2) Q
UALIFIED INVESTMENT AMOUNTS .—The 23
term ‘qualified investment amounts’ means amounts 24
paid for capital investment in the property, facilities, 25
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or equipment of a business premises used for retail 1
sales of the new food retail business.’’. 2
(b) C
REDITPART OFGENERALBUSINESSCREDIT.— 3
Section 38(b) of the Internal Revenue Code of 1986 is 4
amended by striking ‘‘plus’’ at the end of paragraph (40), 5
by striking the period at the end of paragraph (41) and 6
inserting ‘‘, plus’’, and by adding at the end the following 7
new paragraph: 8
‘‘(42) the new food retail business credit deter-9
mined under section 45BB(a).’’. 10
(c) C
LERICALAMENDMENT.—The table of sections 11
for subpart D of part IV of subchapter A of chapter 1 12
of the Internal Revenue Code of 1986 is amended by add-13
ing at the end the following new item: 14
‘‘Sec. 45BB. New food retail business credit.’’.
(d) EFFECTIVEDATE.—The amendments made by 15
this section shall apply to taxable years beginning after 16
the date of the enactment of this Act. 17
Æ
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