Food Desert Relief Supermarket Tax Credit

WELCOME: Food Desert Relief Supermarket Tax Credit Application

The NJ Food Desert Relief Supermarket Tax Credit Program, created under the Economic Recovery Act (ERA) of 2020, encourages the development and long-term operation of supermarkets/grocery stores in Food Desert Communities. The program will provide financial assistance in the form of tax credits to supermarkets/grocery stores in the 50 Food Desert Communities (FDCs) previously designated by NJEDA. The list of FDCs is available here. A searchable map can be used to determine if a specific location is within those boundaries.


Eligibility Information/Instructions:

There are two tax credits available:

· The Supermarket Financing Gap Tax Credit for developers of supermarkets/grocery stores, and

· The Supermarket Initial Operating Cost Tax Credit for the operators of those stores.


You may apply for either of these tax credits, or both, depending upon your role as developer, operator, or developer and operator. Both tax credits have eligibility requirements including, but not limited to, complying with the following criteria:

· Project must be the first or second new supermarket in a designated FDC to be approved under the program

· Applicant must operate or develop a supermarket or grocery store of at least 16,000 square feet

· Construction or rehabilitation of supermarket or grocery store must have begun after January 1, 2021

· Feasibility study must show that without the tax credit award, the project is not economically feasible

· Feasibility study must show that with the tax credit award, the project will be open for business for 7 years and be commercially viable by the 7th year

· Prevailing wage & affirmative action are required on construction & equipment installation

· Applicant must commit that the supermarket will accept SNAP and WIC benefits

· Applicant must commit that the supermarket will maintain at least 10% of retail space dedicated to fresh and/or frozen produce

· Applicant must commit that the supermarket will hold at least one community listening session annually


Supermarket Financing Gap Tax Credit
The Supermarket Financing Gap Tax Credit is for developers and provides a tax credit of up to 40% of project costs for the first new supermarket in an FDC, capped at the project financing gap, and up to 20% of project costs for the second new supermarket in an FDC, capped at the project financing gap.

     Apply for Supermarket Financing Gap Tax Credit


Supermarket Initial Operating Cost Tax Credits
The Supermarket Initial Operating Cost Tax Credit is for supermarket operators, and provides for a tax credit up to the lower of either the initial operating cost shortfall or 100% of initial operating costs for the first new supermarket in an FDC, and the lower of either the initial operating cost shortfall or 50% of initial operating costs for the second new supermarket in an FDC.

 .   Apply for Supermarket Initial Operating Cost Tax Credit


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