New Bill Offers 15% Tax Credit to Grocery Stores to End 'Food Deserts,' Boosts Food Bank Grants

The Healthy Food Access for All Americans Act aims to tackle the problem of “food deserts”—areas where residents lack easy access to fresh, healthy groceries—by creating significant financial incentives for businesses and non-profits to fill the gap. Specifically, it establishes a new tax credit for grocery stores and a grant program for food banks and mobile food vendors willing to set up shop in these underserved areas. The goal is straightforward: use tax breaks and grants to get fresh produce, meat, and dairy closer to the people who need it.

The Grocery Store Incentive: 15% Off the Build

For grocery store chains or developers, the biggest draw is a new tax credit. If you build a brand-new grocery store in a certified food desert, you can claim a tax credit equal to 15 percent of the construction cost. If you’re just renovating an existing space to meet the certification requirements (where at least 35 percent of sales are groceries), the credit drops to 10 percent of the renovation costs. This isn't pocket change; it’s a substantial subsidy designed to offset the risk of building in areas that might be less profitable initially. To qualify, the store must meet the law’s definition of a grocery store and satisfy existing criteria under the Healthy Food Financing Initiative. The catch? If you take the credit, you must reduce the tax basis (the value used for depreciation) of the property by the credit amount, and you have to keep the store operating as a certified provider for five years. If you bail out early, the government can claw back the credit.

Grants for the Community Ground Game

This bill doesn't just focus on big box stores; it also targets community-based efforts. It sets up a federal grant program for non-profit food banks and "temporary access merchants" that serve food deserts. For a permanent food bank, the grant can cover up to 15 percent of qualified construction expenses. For mobile markets, farmers markets, or mobile food banks—the temporary access merchants—the grant can cover up to 10 percent of their annual operational costs. Crucially for non-profits, the bill explicitly states that this grant money is not counted as taxable income.

This is a big win for organizations running mobile food services. To qualify, these mobile vendors must operate in a food desert for a set amount of time each week (farmers markets need at least 10 hours; others need 5 days and 50 hours). However, there's a specific exclusion: if a farmers market is already getting funding from another USDA grant program, they can't get certified for this benefit. This means organizations will have to choose which pot of federal money works best for them.

What Exactly Is a 'Food Desert'?

The entire program hinges on a very specific definition of a “food desert,” which the bill lays out clearly. It's a census tract that checks one of three boxes: 1) A significant portion of the population (500 people or 33%) lives more than a mile from a grocery store in urban areas, or more than 10 miles away in rural areas. 2) The poverty rate is at least 20 percent. 3) The median family income is below 80 percent of the state or metro median. This detailed definition is key because it ensures the tax credits and grants are directed exactly where they are intended—in areas struggling with both low-income and poor food access.

The Accountability Factor: The Five-Year Commitment

The federal government isn't just handing out money; it wants commitment. Every recipient—whether a grocery store, food bank, or mobile vendor—must get certified by the Secretary. This certification means agreeing to the five-year recapture rule. If a grocery store or food bank stops meeting the eligibility requirements within five years of opening, the Secretary can force them to pay back the credit or grant amount via a tax increase. For businesses, this means the financial incentive comes with a five-year lock-in period. If you’re a small business owner relying on this credit to open a store, you need to be absolutely certain you can maintain operations and sales requirements for half a decade, or you could face a hefty tax bill down the line.