Charitable Contributions of Food Inventory: Proposals for Change Page: 4 of 15
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Charitable Contributions of Food Inventory:
Proposals for Change
This report discusses the temporary change in the tax law governing charitable
donations of food. Recent legislation expanded the existing tax incentive for firms
that are C corporations to all businesses that donate food to charity.
In response to the devastation from Hurricane Katrina, the Katrina Emergency
Tax Relief Act of 2005 (KETRA, P.L. 109-73) was enacted. That legislation
included a temporary expansion of the tax deduction for charitable contributions of
food inventory. The law allowed all donors of wholesome food inventory to benefit
from the enhanced deduction for donations made between August 28, 2005, and
January 1, 2006. The Pension Protection Act of 2006 (P.L. 109-280) extended the
temporary expansion through January 1, 2008.
In the 110th Congress, the Good Samaritan Hunger Relief Tax Incentive
Extension Act of 2007 (S. 689) proposes to permanently extend and expand the
charitable deduction for contributions of food inventory. Additionally, S. 1132
proposes to qualify Indian tribes as eligible recipients of tax deductible contributions
of food inventory. H.R. 3996, the Temporary Tax Relief Act of 2007, which was
passed in the House on November 9, 2007, includes a provision to extend the current
temporary expansion of eligible donors through December 31, 2008. H.R. 2419, the
Farm, Nutrition, and Bioenergy Act of 2007, which was passed in the House in July
2007 and the Senate in December 2007, includes a provision to extend the current
temporary expansion of eligible donors through December 31, 2009.
Tax Law
A discussion of the tax treatment for contributions made by all types of
businesses is provided. Generally, these contributions may be made only to certain
types of nonprofit organizations, may be deductible for income tax purposes only up
to specified limits, and may be in the form of either cash or property. The charitable
contribution deduction is allowed only for the taxable year in which the contribution
is made; any unpaid subscriptions or pledges are not deductible until actually
fulfilled.
Some of the more typical organizations to which contributions are deductible
include churches, universities, schools, and hospitals, as well as many other public
assistance charities (such as food pantries, soup kitchens, homeless shelters, etc). If
a contribution is made to an individual, such as a homeless family living on the
street, that contribution is not deductible even though actuated by charitable motives.
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Jackson, Pamela J. Charitable Contributions of Food Inventory: Proposals for Change, report, January 16, 2008; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc822529/m1/4/: accessed April 23, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.