Colorado Gov. Jared Polis and the Department of Agriculture have announced a new tax credit for Colorado’s small food retailers and small family farms to help increase access to healthy groceries in communities across the state. 

Eligible businesses who have made equipment purchases for the purpose of expanding access to healthy food for low-access populations can apply for the refundable income tax credit for eligible equipment purchases. Starting this year, up to $10 million per year is available to help small businesses that fit the criteria. The Community Food Access Tax Credit will continue through 2030. 

“Colorado is the proud home to the best produce and food in the world, and this new support will increase access to healthy food and decrease the cost of groceries, especially in underserved rural and urban areas. It will also support  small farms and food retailers that put food on the table for millions of people here in Colorado and around the world,” said Polis.

“Both rural and urban communities across Colorado experience lack of access to freshly harvested or grown food. This refundable tax credit program will help small food retailers and small farms bring healthy food to communities with low access to fresh, nutritious food,” said Commissioner of Agriculture Kate Greenberg. “Small businesses will be able to get back 75 percent or more of the cost of expensive equipment necessary to provide fresh produce, meat, and dairy products to communities across Colorado.”

The Community Food Access Tax Credit is intended to increase access to healthy groceries and help to lower their cost. Communities with low access to fresh and healthy food can be found across the state. These tax credits, funded through House Bill 23-1008, will build on the success of the Community Food Access Grants, which were created through House Bill 22-1380 and signed by Polis. These grants help stores, farm stands, farmers markets and farms purchase equipment or cover operating expenses that would allow them to increase the availability of healthy food. To date, 117 grants have been awarded in 42 Colorado counties. Of those, 45% of awarded businesses self identified as BIPOC led, and 58% were located in rural Colorado. A total of $5 million in grants has been awarded.

Kusi Appiah, owner of Ghana International Market in Aurora, received a Community Food Access Grant to purchase new refrigeration equipment for his store. 

“My retail store is an African International grocery retail store that serves mostly low-income population including mostly refugees, Caribbeans, other international [people] residing in Aurora, East Colfax Neighborhood,” Appiah said. “I would not have been able to afford this freezer or this cooler without the grant funds. I am already seeing an impact on my electricity bill.” 

The improved and expanded cold storage at Ghana International Market will allow for better storage of healthy food like fish and meat. It will also result in lower prices due to the savings from more energy-efficient equipment.

The Community Food Access Tax Credit is intended to be used by small food retailers, farm-direct operations and small family farms who are serving low-income, low-access communities in Colorado. Examples of such businesses include:

• Grocery, corner and convenience stores
• Carnicerías, bodegas or mercantiles
• Farmers’ markets, farm stands and community-supported agriculture
• Small farms, ranches, poultry farms, etc.

The tax credit is available for costly equipment purchases that will increase access to or lower prices for healthy foods in low-income, low-access areas. Businesses can receive tax credits for items such as cold storage, food preservation equipment, shelving and displays, delivery vehicles and more. Noneligible expenses include things such as office supplies, food and product costs, installation costs or salaries. 

Coloradans can learn more about the tax credit program by attending a virtual presentation Sept. 27, 2024, from 12-1 p.m. A Spanish-only presentation takes place Oct. 1, 2024, from 1-2 p.m.

Reducing food insecurity has been one of the strategic priorities CDA has focused on over the past several years, in partnership with other state agencies and food access nonprofits. This tax credit program is operated by the Community Food Access team at CDA, which has helped improve the infrastructure for small retailers and small farmers to bring fresh food to their communities through a grant program.

Community Food Access grants

The Small Food Business Recovery and Resilience grants were established through House Bill 22-1380. The final round of funding was just awarded in the program.

The application and selection process was developed with the guidance of the Small Food Business Recovery and Resilience Grant Advisory Committee, made up of farmers and retailers as well as financing and food justice experts. The program also hosted three public listening sessions to gain insight on the program’s development.

“The success of this grant program can really be attributed to the great number of stakeholders who engaged with its development and conception,” said Amanda Laban, markets division director at CDA. 

To educate Colorado’s eligible businesses about the grant, CDA contracted with seven grassroots organizations across the state to help businesses learn about and apply for the grant. The application was offered in English, Spanish and any other language by request to encourage diverse businesses to apply. 

“Technical assistance from trusted local organizations was an essential part of reaching retailers in communities that would benefit from this grant the most,” said Mickey Davis, Community Food Access program manager. “Without the help of our partners, these small businesses may never have known about this opportunity, or may have been too intimidated to apply.” 

The grant - which had a maximum award value of $50,000 and an average amount of $43,000, is already making an impact in Colorado communities. 

The Community Food Access program is funded by the State and Local Fiscal Recovery Fund.

Source: Colorado Department of Agriculture