(The Center Square) – Tax credits will be the topic for the Missouri House Committee on Economic Development on Wednesday as it holds hearings on three bills, including two for grocery stores in so-called food deserts.
House Bill 2730, sponsored by Rep. Dane Diehl, R-Butler, would expand the current amount for tax credits available from $200,000 to $3 million and make them available for expenses incurred for establishing or improving a specialty-crop farm or a full-service grocery store in a food desert. House Bill 2438, sponsored by Rep. Emily Weber, D-Kansas City, is similar and both have sunsets after six years of the effective date.
A food desert is defined as having a poverty rate of at least 20%, or a median family income of less than 80% of the statewide average. At least 500 people – or 33% of the population – must be located at least one-half mile away from a full-service grocery store in an urban area or at least 10 miles away from a full-service grocer in a rural area.
The bills would provide a tax credit of up to $2.5 million for expenses incurred in establishing a full-service grocery store located in a food desert. The tax credit will be equal to 50% of eligible expenses that exceed initial expenses. Eligible expenses are those incurred in construction or development of property while establishing a full-service grocery store.
“The initial eligible expenses must be at least $1 million if the full-service grocery store is located in a charter county, a first class county, or in St Louis City, or at least $500,000 if located in any other county,” according to the Diehl’s bill summary.
The bill requires the Department of Economic Development to reclaim the tax credits if construction on the grocery store isn’t completed within five years or if the store fails to operate for at least 10 consecutive years.
The bills define a farm’s specialty crops as fruits and vegetables, tree nuts, dried fruits and horticulture and nursery crops. A small-scale farm is defined as being no larger than 30 acres and growing three or more types of specialty crops at any given time on at least half of the acreage. However, the bill modifies the definition of an urban farm to be five acres or less.
House Bill 2589, sponsored by Rep. Brenda Shields, R-St. Joseph, modifies a taxpayer’s liability if tax credits in two programs are denied because all credits have been redeemed.
Currently, if a taxpayer is denied a “Champion for Children Tax Credit” or “Donated Food Tax Credit” due to a lack of available funds and that denial results in a balance owed to the state, the taxpayer has 60 days from the notice of denial to make payment arrangements. Shields’ bill would not hold taxpayers liable for any additional tax, penalty or interest on the income tax balance provided payment is arranged within 60 days of the credit denial.
