Ag Community Donations – AB 152 (Fuentes)
10% Tax Credit for California Growers Donating Produce to Food Banks
More than 100,000 in Ventura County have reported that they are hungry– including many seniors and working parents whose budgets for food are squeezed by the economic downturn and slow recovery.* Nearly 25% of the hungry are children. FOOD Share has experienced an unprecedented increase in requests. From 2008 to 2012, FOOD Share saw a 69% increase in the number of people needing food. Many of these people find it difficult to purchase healthy foods such as fruits and vegetables because of both cost constraints and a lack of access in their community. AB 152 (Fuentes) offers California growers a 10 percent tax credit for the wholesale value of fresh fruits and vegetables donated to qualified nonprofits such as FOOD Share.
FOOD Share and the Ag Community
FOOD Share, Ventura County’s only regional food bank, distributes millions of pounds of food each year to those in need. FOOD Share provides food year-round to more than 74,500 Ventura County children, adults, seniors and families each month via more than 150 Ventura County pantry partner agencies and multiple programs.
FOOD Share has a long history with the generous agricultural community of Ventura County. In 2011 FOOD Share received over 4 million pounds of donations of fresh fruits and vegetables which accounts for nearly one half of the food FOOD Share receives and distributes. FOOD Share distributes fresh produce through programs such as the Senior Brown Bag supplemental nutrition program that provides supplemental groceries to over 2,000 low income seniors throughout Ventura County, the Senior Nutrition Program providing home delivered meals to homebound seniors in Oxnard and Ventura, and the Kids’ Farmers’ Markets that offer nutrition education, healthy recipe preparation, taste testing and a farmers’ market free fresh produce “shopping experience” to children in Ventura County after school programs.
How Growers Can Donate to FOOD Share – it’s easy!
- Growers can donate to FOOD Share by contacting FOOD Sourcing Director Chris DeVan.
- When donating, the grower will provide FOOD Share with the estimated value of the donation and information about the origin of the donation.
- FOOD Share will provide the grower with a receipt which includes information about the type, quantity, and origin of the donation upon receiving the produce.
- The grower can use this receipt to receive the tax credit and must provide it for the Franchise Tax Board if it is requested.
*Feeding America, “Map the Meal Gap.” www.feedingamerica.org
Through The Emerson Good Samaritan Act, FOOD Share can ensure that barring gross negligence or intentional misconduct, liability for faulty donations will not fall on the shoulders on the donor.
AB 152: SEC. 3. Section 17053.88 is added to the Revenue and Taxation Code, to read:
17053.88. (a) In the case of a qualified taxpayer who donates fresh fruits or fresh vegetables to a food bank located in California under Chapter 5 (commencing with Section 58501) of Part 1 of Division 21 of the Food and Agricultural Code, for taxable years beginning on or after January 1, 2012, and before January 1, 2017, there shall be allowed, without regard to the taxpayer’s method of accounting, as a credit against the “net tax” (as defined by Section 17039), an amount equal to 10 percent of the cost that would otherwise be included in inventory costs under Section 263A of the Internal Revenue Code, or that would be required to be included in inventory costs under Section 263A of the Internal Revenue Code, but for the exception for farming businesses contained in Section 263A(d) of the Internal Revenue Code, with respect to those fresh fruits or fresh vegetables.
(b) For purposes of this section, “qualified taxpayer” means the person responsible for planting a crop, managing the crop, and harvesting the crop from land.
(c) If the credit allowed by this section is claimed by the qualified taxpayer, any deduction otherwise allowed under this part for that amount of the cost paid or incurred by the qualified taxpayer that is eligible for the credit shall be reduced by the amount of the credit provided in subdivision (a).
(d) The donor shall provide to the nonprofit organization the estimated value of the donated fresh fruits or fresh vegetables and information regarding the origin of where the donated fruits or vegetables were grown, and upon receipt of the donated fresh fruits or fresh vegetables, the nonprofit organization shall provide a certificate to the donor. The certificate shall contain a statement signed and dated by a person authorized by that organization that the product is donated under Chapter 5 (commencing with Section 58501) of Part 1 of Division 21 of the Food and Agricultural Code. The certificate shall also contain the type and quantity of product donated, the name of donor or donors, the name and address of the donee nonprofit organization, and, as provided by the donor, the estimated value of the donated fresh fruits or fresh vegetables and its origins. Upon the request of the Franchise Tax Board, the qualified taxpayer shall provide a copy of the certification to the Franchise Tax Board.
(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and for the six succeeding years if necessary, until the credit has been exhausted.
(f) Using the information available to the Franchise Tax Board from the certificates required under subdivision (d) and subdivision (d) of Section 23688, the Franchise Tax Board shall report to the Legislature on or before December 1, 2014, and each December 1 thereafter until the inoperative date specified in subdivision (g), regarding the utilization of the credit authorized by this section and Section 23688.The Franchise Tax Board shall also include in the report the estimated value of the fresh fruits and fresh vegetables donated, the county in which the products originated, and the month the donation was made.
(g) (1) A report to be submitted pursuant to subdivision (f) shall be submitted in compliance with Section 9795 of the Government Code.
(2) The requirement for submitting a report imposed under subdivision (f) is inoperative on January 1, 2016, pursuant to Section 10231.5 of the Government Code.
(h) This section shall remain in effect only until December 1, 2017, and as of that date is repealed.