The National Restaurant Association last week thanked members of the House Committee on Ways and Means for approving the 'Fighting Hunger Incentive Act of 2014,' legislation that makes permanent a temporary provision allowing incorporated small businesses the enhanced deduction for donations of food inventory.
“America’s restaurants give back to their communities in major ways, the most significant of which is through food donation,” said Dave Koenig, Vice President, Tax and Profitability, National Restaurant Association. “The deduction for charitable donation of food inventory is a critical tool in alleviating hunger, as it helps to offset the costs associated with preserving, storing and transporting food donations. We thank Congressman Tom Reed for his leadership in securing committee approval.”
According to National Restaurant Association research, 84 percent of restaurants donate food to individuals or charities. The NRA has partnered with Food Donation Connection (“FDC”) to strengthen food donation efforts. Founded by a former restaurant executive, FDC serves as the liaison between restaurants and social service agencies adept at getting food to people in need. FDC helps restaurants develop and implement programs designed to provide an alternative to discarding edible food. Since 1992, FDC has helped facilitate the donation of over 210 million pounds of food to non-profit hunger relief agencies.
H.R. 4719 would improve the provision by extending the enhanced deduction to pass-through entities. For nearly 30 years since its inception in 1976, the tax deduction for contributions of food inventory was limited to C corporations. In 2005, the provision was temporarily expanded to include pass-through entities (i.e., Subchapter S corporations, limited liability companies). This temporary expansion has been extended on subsequent occasions. By allowing non-C corporations to take the same deduction, FDC has reported a 127 percent increase in pounds of food donated by restaurant clients. Making permanent the temporary component of the deduction would make it more effective, while advancing the objectives of providing taxpayers with simplicity and predictability.
Read the NRA’s letter of support for H.R. 4719.
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