Section 1 Short title
This Act may be cited as the “Restoring Establishment Deductions and Uplifting Competition to Ease Food Prices Act” or the “REDUCE Food Prices Act”.
Restoring Establishment Deductions and Uplifting Competition to Ease Food Prices Act
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.
Sec. 2 Increased rehabilitation tax credit for qualified small food retail businesses
In general— Section 47 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(e) Special rule for qualified small food retail businesses
“(1) In general—In the case of a qualified rehabilitated building placed in service by a qualified small food retail business, subsection (a)(2) shall be applied by substituting “25 percent” for “20 percent”.
“(2) Qualified small food retail business defined
“(A) In general—For purposes of paragraph (1), the term “qualified small food retail business” means a business—
“(i) which is described in section 38(c)(5) (determined by applying “$200,000,000” for “$50,000,000” in such section),
“(ii) at least 70 percent of the annual average gross receipts of which are attributable to the retail sale of food or produce, and
“(iii) which is located in a low-competition area.
“(B) Low-competition area—For purposes of subparagraph (A), the term “low-competition area” means a county with respect to which the Herfindahl-Hirschman Index for the retail food sector, as measured by the Economic Research Service of the United States Department of Agriculture, is at or above a level of 1,400.”
Effective date— The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.
Sec. 3 Increased work opportunity tax credit for qualified small food retail businesses
by striking “The amount” and inserting
“(A) In general—The amount”
by adding at the end the following new subparagraph:
“(B) Increased limitation for qualified small food retail businesses—In the case of wages paid by an employer that is a qualified small food retail business (as defined in section 47(e)(2)(A)), subparagraph (A) shall be applied—
“(i) by substituting “$8,000” for “$6,000”,
“(ii) by substituting “$14,000” for “$12,000”,
“(iii) by substituting “$16,000” for “$14,000”, and
“(iv) by substituting “$26,000” for “$24,000”.”
Effective date— The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Sec. 4 Increased bonus depreciation for qualified small food retail businesses
In general— Section 168(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(10) Special rule for qualified small food retail businesses
“(A) Increased applicable percentage for property placed in service by qualified small food retail businesses—In the case of property placed in service by a taxpayer that is a qualified small food retail business (as defined in section 47(e)(2)(A)), paragraph (6) shall be applied—
“(i) in subparagraph (A)—
“(I) by substituting “70 percent” for “60 percent” each place it appears,
“(II) by substituting “50 percent” for “40 percent” each place it appears, and
“(III) by substituting “30 percent” for “20 percent” each place it appears, and
“(ii) in subparagraph (B)—
“(I) by substituting “70 percent” for “60 percent” each place it appears,
“(II) by substituting “50 percent” for “40 percent” each place it appears, and
“(III) by substituting “30 percent” for “20 percent” each place it appears.
“(B) Increased applicable percentage for plants bearing fruits and nuts planted or grafted by qualified small food retail businesses—In the case of plants bearing fruits and nuts planted or grafted by a taxpayer that is a qualified small food retail business (as defined in section 47(e)(2)(A)), paragraph (6)(C) shall be applied—
“(i) by substituting “70 percent” for “60 percent” each place it appears,
“(ii) by substituting “50 percent” for “40 percent” each place it appears, and
“(iii) by substituting “30 percent” for “20 percent” each place it appears.”
Effective date— The amendments made by this section shall apply to property placed in service, or plants planted or grafted, after the date of the enactment of this Act.
Sec. 5 Increased qualified business income deduction for qualified small food retail businesses
In general— Section 199A of the Internal Revenue Code of 1986 is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection:
“(i) Special rule for qualified small food retail businesses—In the case of a qualified small food retail business (as defined in section 47(e)(2)(A)), subsection (a)(2) shall be applied by substituting “25 percent” for “20 percent”.”
Effective date— The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Sec. 6 New food retail business tax credit
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“45BB. New food retail business credit
“(a) In general—For purposes of section 38, in the case of a new small food retail business, the new food retail business credit under this section for the taxable year is an amount equal to 15 percent of qualified investment amounts paid or incurred during the taxable year.
“(b) Definitions—For purposes of this section—
“(1) New food retail business—The term “new food retail business” means a qualified small food retail business (as defined in section 47(e)(2)(A)) which began operations during the previous three taxable years.
“(2) Qualified investment amounts—The term “qualified investment amounts” means amounts paid for capital investment in the property, facilities, or equipment of a business premises used for retail sales of the new food retail business.”
Credit part of general business credit— Section 38(b) of the Internal Revenue Code of 1986 is amended by striking “plus” at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting “, plus”, and by adding at the end the following new paragraph:
“(42) the new food retail business credit determined under section 45BB(a).”
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Effective date— The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.