(Last Updated January 28, 2026)

By Stephanie Johnson, Group Vice President, Government Relations & Political Affairs 

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (also known as HR 1, OBBB, OB3, BBB, and the Working Families Tax Cut Act), which included many of the top legislative priorities he campaigned on. Extending tax cuts from the 2017 Tax Cuts and Jobs Act, the bill also provides increased funding for immigration enforcement and national defense. To pay for the president’s priorities, Congress made cuts to Medicaid insurance coverage and the Supplemental Nutrition Assistance Program (SNAP).  

Of the many changes Congress made to SNAP, some directly impact SNAP sales, while others do not. Many impacts are state-specific, which you will see below. It’s important to note what this bill did not impact, which are the SNAP waivers to restrict so-called “unhealthy food.” SNAP waivers are a different topic altogether, and you can learn more about waivers happening at the state level here.  

Provisions that Impact SNAP Sales: Eligibility Reforms

The bill includes several provisions that impact eligibility for SNAP participants, including work requirements, utility allowances, internet deductions, and non-citizen immigrant participation. The total cuts to eligibility are estimated to total $88 billion over the next ten years.   

NGA reviewed the Congressional Budget Office analysis and created Table 1 to help visualize the impacts by year. 

*Percent of sales are based on the Congressional Budget Office SNAP spending estimates through 2034.

Over the next nine years, SNAP sales are expected to decrease on average by 8.7% from the current spending levels. These are estimates are based on the economic impact of SNAP nationwide; the impact on your store(s) may vary depending on the location of your business and the demographics of your community.   

Wild Card Provisions: State Cost Share Reforms 

Under the new law, states will now be required to share the cost of SNAP benefits with the federal government. Traditionally, states have split the administrative costs with the federal government 50/50. Starting in 2028, states will be responsible for 75 percent of the administrative costs and a percentage of the benefits.   

The amount states will need to cover will be based on their error rate, or the mistakes made when obtaining or disbursing benefits. Beginning in 2028, the cost share for states will be as follows:   

  • States with <6% error rate will pay 0% of benefits   
  • States with 6-8% error rates will pay 5% of benefits  
  • States with 8-10% error rates will pay 10% of benefits  
  • States with >10% error rates will pay 15% of benefits   
  • States with error rates higher than 13.34% will begin in 2029 or 2030, depending on their 2025 and 2026 error rates respectively.  

Click to see your state’s error rate here. 

Because the impact on states can be zero to billions of dollars, it is difficult to predict what will happen in each state. States do not have the ability to change benefit amounts, but they can change factors that impact eligibility, like asset testing, to reduce their costs. We could see states attempt to reduce further participation to decrease their cost share. 

Provisions with Limited Impact to Grocers 

The bill ends the national education and obesity prevention grant program also known as SNAP-Ed. This program provides nutrition education to SNAP participants, often through university extension programs. Additionally, the bill makes future thrifty food plan reevaluations cost neutral. This prevents any large increases moving forward like the 21% increase we saw in October of 2022. The yearly inflationary increases remain intact.  

Final Thoughts 

The impacts of this legislation will unfold gradually, with immediate effects being on SNAP eligibility and longer-term changes in state administration and funding. For independent grocers, the most notable impact will be the potential reduction in SNAP customers, though the degree will vary by location. As states respond to new responsibilities and budget pressures, the grocery industry will need to stay informed and engaged to understand how these policy shifts play out at the local level.