(Washington D.C.)- Rep. Sander Levin introduced legislation to make permanent an important provision of the tax code that encourages businesses to donate food inventory to food banks and other hunger-fighting organizations.   

As the demand for food assistance continues to outpace supply in communities across America, this tax incentive program is working to encourage the donation of healthy foods to people in need,” said Rep. Sander Levin.  “We must act to make it permanent part of the tax code so it becomes a permanent part of the food donation plans for these eligible businesses.”

Background

Under current law, businesses that donate food inventory to charity are eligible for a special deduction equal to their basis in the inventory plus one half the gain that would have been realized had the product been sold.  Unfortunately, the eligibility of business that are not C corporations, including farmers and ranchers, is set to expire at the end of this year.  Permanently extending this deduction for contributions of food inventory to all business taxpayers is a needed step in the continued fight against hunger in America.

In the year since the provision was enacted in the Pension Protection Act of 2006, America’s Second Harvest, the Nation’s Food Bank Network, has seen a 2% increase in overall food donated in FY 2007, and specifically a 28% increase in the amount of fresh fruits and vegetables donated. 

According to America’s Second Harvest, the Nation’s Food Bank Network, the majority of their 200 food banks have bare warehouse shelves due to shortages in USDA commodities and are struggling to make this up with private donations.  The “Hunger In America 2006” study conducted by Mathematica Policy Research, Inc., found that over 25 million individuals seek emergency food assistance each year from the America’s Second Harvest network of food banks and through the food pantries, soup kitchens and shelters the food banks serve.  Hunger is increasing in the United States at the same time that the USDA estimates that more than 96 billion pounds of food is being thrown away and filling landfills. 

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