Texas Tax Break for Grocery Stores in Food Deserts

Texas House Bill 304 creates a new way to support grocery stores and healthy corner stores in neighborhoods that need them most. Starting in January 2026, businesses that open these stores in food deserts—areas where people have trouble finding fresh food—can claim a tax credit equal to 5 percent of their startup costs.

A food desert is a neighborhood with limited access to healthy food retailers and low incomes, or an area with serious problems getting fresh food. To qualify for the tax credit, a store must be a grocery store with at least 66 percent of its space selling food, or a healthy corner store with at least 20 percent of space for fresh produce and perishable foods. The store must be located in a low or moderate income area and serve people in those communities.

To receive the credit, businesses must apply for a certificate of eligibility from the Texas Department of Housing and Community Affairs. The department reviews applications and confirms that stores meet all requirements. Then, businesses provide proof of their spending and must have audited cost reports from a certified public accountant.

Stores must accept SNAP benefits (food assistance) and WIC benefits (for women, infants, and children) within 90 days of opening. Stores must also stay open year-round. This law helps business owners bring fresh food to our communities while getting support for the real costs of starting up.

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