Rahul Sharma (Editor)

Fighting Hunger Incentive Act of 2014

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Covid-19
Introduced on  May 22, 2014
Number of Co-Sponsors  9
Fighting Hunger Incentive Act of 2014
Full title  To amend the Internal Revenue Code of 1986 to permanently extend and expand the charitable deduction for contributions of food inventory.
Introduced in  113th United States Congress
Sponsored by  Rep. Tom Reed (R, NY-23)

The Fighting Hunger Incentive Act of 2014 (H.R. 4719) is a bill that would amend the Internal Revenue Code to permanently extend and expand certain expired provisions that provided an enhanced tax deduction for businesses that donated their food inventory to charitable organizations.

Contents

The bill was introduced into the United States House of Representatives during the 113th United States Congress. Combined with several other bills, it passed the House of Representatives on July 17, 2014 as the America Gives More Act.

Background

After Congress expanded this tax deduction in 2006 to allow entities beyond C corporations to donate, the food bank donations increased 127 percent. This tax deduction for the charitable donation of food has existed since 1976.

Research done by the National Restaurant Association found that "84 percent of restaurants donate food to individuals or charities."

Provisions of the bill

This summary is based largely on the summary provided by the Congressional Research Service, a public domain source.

The Fighting Hunger Incentive Act of 2014 would amend the Internal Revenue Code to: (1) make permanent the tax deduction for charitable contributions of food inventory, (2) increase from 10% to 15% of taxpayer aggregate net income the amount of deductible food inventory contributions which a taxpayer may make in any taxable year (15% of the taxable income of C corporations), and (3) set forth rules for determining the basis of contributed food for taxpayers other than C corporations and the fair market value of such food.

Congressional Budget Office report

This summary is based largely on the summary provided by the Congressional Budget Office, as ordered reported by the House Committee on Ways and Means on May 29, 2014. This is a public domain source.

H.R. 4719 would amend the Internal Revenue Code to permanently extend and expand certain expired provisions that provided an enhanced tax deduction for businesses that donated their food inventory to charitable organizations. The enhanced deduction for food inventory contributions expired after December 31, 2013, and applied to sole proprietors, partnerships, and other businesses not organized as C corporations (which are already permanently allowed an enhanced deduction under more general provisions of current law). H.R. 4719 would also expand the maximum deduction for all businesses by allowing deductions of food inventory donations up to 15 percent of the net income of the donating organization, an increase from the 10 percent allowed permanently under current law for C corporations and allowed previously for other businesses. In addition, the bill would allow certain businesses to make alternative assumptions about the cost basis and fair market value of donated food inventory.

The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 4719 would reduce revenues, thus increasing federal budget deficits, by about $1.9 billion over the 2014-2024 period.

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending and revenues. Enacting H.R. 4719 would result in revenue losses in each year beginning in 2014.

JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Procedural history

The Fighting Hunger Incentive Act of 2014 was introduced into the United States House of Representatives on May 22, 2014 by Rep. Tom Reed (R, NY-23). The bill was referred to the United States House Committee on Ways and Means. It was reported (amended) on June 26, 2014 alongside House Report 113-498.

Debate and discussion

Rep. Tom Reed, who introduced the bill, argued that it makes sense to make this a permanent measure because "doing it on a temporary basis... is part of the problem. We need to make this sound policy permanent in the tax code and I'm optimistic we'll get it to the finish and allow people to take advantage of the tax deduction that would encourage them to use the food rather than put it in a landfill." Reed announced the bill at a food bank in his district, where the food bank's president said that "we should be turning over every rock that we can to get as much food as we can to help meet the need and I think this is definitely one of those things and helps us achieve our goal of ending hunger here in our community."

The American Farm Bureau Federation supported the bill. According to the organization, without the tax write-off, "it is cheaper in most cases for these types of businesses to throw their food away than it is to donate the food."

The National Restaurant Association supported the bill, arguing that "the deduction for charitable donation of food inventory is a critical tool in alleviating hunger" because it "encourages donating the food to charity, by helping to offset the costs associated with preserving, storing and transporting the extra food."

Feeding America supported the bill. Bob Aiken, Feeding America CEO, said "With over 70 billion pounds of food wasted each year, including 6 billion pounds of produce, this legislation will help increase donations and help food banks provide an additional 1.5 billion meals over 10 years to hungry people. We look forward to working with Congress and our partners to see this important bill enacted."

The Obama administration issued a statement that they support charitable initiatives. However, because the bill did not include any offsets for the tax incentives, the President would veto the bill if it ever reached his desk.

References

Fighting Hunger Incentive Act of 2014 Wikipedia


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