Tuesday, November 17, 2015
Tax Deduction for Food Donation Guide Published
We are pleased to announce the publication of another important guide to encourage businesses to donate food to those in need.
Federal Enhanced Tax Deduction for Food Donation: A Legal Guide was published in a coordinated effort by the Harvard Food Law & Policy Clinic and the Food Recovery Project at the University of Arkansas School of Law.
An estimated 40 percent of food produced in the United States goes uneaten. American consumers waste 160 billion pounds of food each year; food is also wasted on farms and in stores, schools, and restaurants. At the same time, almost 15 percent of U.S. households are food insecure at some point during the year. Diverting a fraction of the wholesome food that currently goes to waste in this country could effectively end food insecurity for all Americans. Farms and food businesses can play a key role by donating more food to organizations that serve those in need.
The federal government has recognized the importance of food donation and provides tax deductions to incentivize businesses to donate food. Under current federal law, businesses that donate property, including food, may claim a general tax deduction in the amount of the property’s basis. One type of business, C corporations, may claim an enhanced tax deduction that exceeds the property’s basis for donating certain property, including food.
Those businesses eligible for the enhanced tax deduction must meet certain requirements to receive the enhanced deduction that are not necessary to receive the general tax deduction. To help food donors access this valuable tax incentive the Harvard Food Law & Policy Clinic and the Food Recovery Project at the University of Arkansas School of Law developed a plain-language legal guide, Federal Enhanced Tax Deduction for Food Donation. This document first provides an overview of federal tax deductions available for businesses that donate food, and then explains the additional requirements that C corporations must meet to receive the enhanced tax deduction.
The Food Law & Policy Clinic's blog provides additional information about the release of this important new publication and references the ongoing work of the clinic. See, FLPC, in partnership with the Food Recovery Project, Launches Legal Guide on the Federal Enhanced Tax Deduction for Food Donations.
This is the third in a series of important legal guides on food waste published by the Food Recovery Project and Harvard's Food Law & Policy Clinic. The Food Recovery Project at Arkansas published Food Recovery: A Legal Guide that was referenced recently on an episode of John Oliver's show Last Week Tonight. The Food Law & Policy Clinic published the The Dating Game: How Confusing Food Date Labels Lead to Food Waste in America with NRDC, a publication that de-mystified the confusing issue of food product dating - emphasizing that dates do not reflect a food safety concern and actually encourage food waste.