2024 -- H 7995

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO TAXATION -- TAX CREDIT FOR FOOD DONATION

     Introduced By: Representatives McEntee, Fogarty, Tanzi, Cortvriend, McGaw, Knight,
Handy, Casimiro, Edwards, and Spears

     Date Introduced: March 05, 2024

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 33.7

TAX CREDIT FOR FOOD DONATION

     44-33.7-1. Definitions.

     As used in this chapter:

     (1) "Apparently wholesome food" means food that is fit for human consumption at the time

it was donated as long as it meets all safety and safety-related standards required by federal, state,

and local laws regardless of compliance with any laws, rules or ordinances regulating the packaging

or labeling of food which are not linked to food safety. "Apparently wholesome food" as stipulated

in the Bill Emerson Good Samaritan Food Donation Act is defined as "food that meets all quality

and labeling standards imposed by federal, state, and local laws and regulations, even though the

food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other

conditions." "Apparently wholesome food" does not include canned goods that are leaking,

swollen, dented on a seam, or no longer airtight.

     (2) "Donate" means to give without requiring anything of monetary value from the

recipient, except that the term shall include giving food, notwithstanding that the donor receives or

charges a Good Samaritan reduced price.

     (3) "Division" means the division of taxation.

     (4) "Good Samaritan reduced price" means a price that is an amount not greater than the

cost of handling, administering, harvesting, processing, packaging, transporting, and distributing

the apparently wholesome food.

     (5) "Nonprofit organization" means a nonprofit organization that is exempt from federal

taxation pursuant to § 501(c)(3) of the Federal Internal Revenue Code, 26 U.S.C. § 501(c)(3) that:

     (i) Operates for religious, charitable, or educational purposes;

     (ii) Does not provide net earnings to, or operate in any other manner that inures to the

benefit of, any officer, employee, or shareholder of the entity; and

     (6) "Qualified taxpayer" means an individual, corporation, partnership, organization,

association, or governmental entity, including a producer, retail grocer, wholesaler, hotel, motel,

manufacturer, restaurant, caterer, farmer, school food authority, institute of higher education,

nonprofit food distributor, or hospital.  

     44-33.7-2. Credit for food donation.

     (a) For taxable years beginning on or after January 1, 2025, any qualified taxpayer that

donates apparently wholesome food shall be allowed a credit to be computed as provided in this

chapter against a tax imposed by chapters 11, 14, 17, and 30 of this title, for the taxable year of the

donation. The qualified taxpayer shall be allowed a credit in an amount equal to seventy-five (75%)

percent of the fair market value of such apparently wholesome food. This credit shall not exceed

five thousand dollars ($5,000) per tax year.

     (b) In the case of a qualified taxpayer who transports any apparently wholesome food

donated in accordance with subsection (a) of this section for taxable years beginning on or after

January 1, 2025, there shall be allowed a credit to be computed as provided in this chapter against

a tax imposed by chapters 11, 14, 17, and 30 of this title, for the taxable year of the donation. The

qualified taxpayer shall be allowed a credit in an amount equal to fifty (50%) percent of the

transportation costs (or any portion thereof) paid or incurred by the qualified taxpayer with respect

to the conveyance of a donated food, including the coordination or arrangement of transportation

services, in connection with the transportation of that qualified donated food item. This credit shall

not exceed five thousand dollars ($5,000) per tax year. This credit shall only be allowed if the

qualified taxpayer does not receive anything of monetary value, including receipt of a Good

Samaritan reduced price.

     (c) Credits shall be allowed under this section only if:

     (1) The use of the donated food by the donee nonprofit organization is related to providing

food to the needy; and

     (2) The donated food, if sold by the donee nonprofit organization, is provided to or sold to

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the needy or other nonprofit organizations that intend to use the food to provide food to the needy

at no cost or at a Good Samaritan reduced price.

     (d) Upon receipt of the donated food, the nonprofit organization shall provide a certificate

to the qualified taxpayer, which shall contain the name of the qualified taxpayer, the name and

address of the donee nonprofit organization, the date of the donation, the type and quantity of

donated food, and, as provided by the qualified taxpayer, the fair market value of the donated food.

The certificate shall also include a statement by the donee nonprofit organization that its use and

disposition of the donated food complies with the requirements under subsection (c) of this section.

     (e) For every taxable year for which a qualified taxpayer seeks a tax credit under this

chapter, the person shall apply to the division in accordance with the forms, instructions, dates, and

procedures prescribed by the division.

     44-33.7-3. Limit on tax credit.

     (a) The amount of the credit claimed under § 44-33.7-2(a) and (b) shall not exceed the total

amount of tax imposed upon the qualified taxpayer for the taxable year. Any credit not usable for

the taxable year for which the credit was first allowed may be carried over for credit against the

income taxes of the qualified taxpayer in the next five (5) succeeding taxable years or until the total

amount of the tax credit has been taken, whichever is sooner.

     (b) Credits granted to a partnership, limited liability company, or electing small business

corporation (S corporation) shall be allocated to the individual partners, members, or shareholders,

respectively, in proportion to their ownership or interest in such business entities.

     (c) Any tax credits claimed shall not reduce a corporation's tax liability below the state

corporate minimum tax.

     (d) This chapter amends § 44-30-2.6 to add the tax credit for food donation as an allowable

credit against personal income tax.

     44-33.7-4. Promulgation of rules and regulations.

     The division shall be authorized to develop guidelines, rules or regulations implementing

the provisions of this chapter. The guidelines, rules and regulations shall include procedures for the

allocation of tax credits among qualified taxpayers. 

     44-33.7-5. Reporting requirements.

     Using information available to the division, the division shall report to the general

assembly, annually, through the division of taxation’s testimony at the May revenue estimating

conference, regarding the use of the credit authorized under this chapter. The report shall include,

at a minimum, the credits generated in the taxable year, the credits claimed in the taxable year, and

the number of qualified taxpayer claimed credits.

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     SECTION 2. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is hereby

amended by adding thereto the following section:

     44-30-28. Food donation tax credit.

     Pursuant to the provisions of chapter 33.7 of title 44, an entity or individual shall be entitled

to an income tax credit for the donation of food up to five thousand dollars ($5,000) per year.

     SECTION 3. This act shall take effect on January 1, 2025.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- TAX CREDIT FOR FOOD DONATION

***

     This act would provide a tax credit for food donations by qualified taxpayers to nonprofit

organizations up to five thousand dollars ($5,000) per year.

     This act would take effect on January 1, 2025.

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