Congress Considering Food Bank Donation Incentives
Tax policy is one of the innovative ways to allow businesses to donate large volumes of nutritious food to food banks throughout the country. Initially created in 1976, the current IRS code provides an incentive for businesses to donate food that would otherwise be wasted. A temporary expansion in 2006 allowed small businesses including many restaurants, retail, and produce suppliers to increase donations.
Currently, Food Lifeline and our partners across the country are working to pass the bipartisan Good Samaritan Hunger Relief Tax Incentive Act which would:
- Permanently extend the deduction for both large and small businesses. The inclusion of small businesses was only temporary, and expired at the end of 2013. When this expansion was implemented in 2006, it led to a 137% increase in donations nationwide.
- Increase the amount of allowable deduction to full fair market value. Currently businesses are only allowed to deduct a portion of the value of the product they donate, often making it cheaper to throw food away than to donate it.
- Further expand the types of businesses that are allowed to benefit from the deduction, but who are currently excluded due to their business structure, primarily farmers and ranchers. Because of their accounting methods, these businesses are currently left out
These changes would create opportunities for the many businesses interested in donating food, rather than letting it go to waste, but for whom it isn’t financially feasible. In Washington, especially, with our rich and robust agricultural economy the potential is great. Additionally, it would also reward the businesses who do currently donate to us by helping ease the financial burden.
Currently, both the Senate and the House have versions of this legislation pending. It looks most likely that they will vote on the bills following mid-term elections in November before the new congress is sworn in. Stay tuned for how you can support our efforts to move these bills forward!