Youngstown Daily Legal News

Proposal would give restaurants a tax break for food donations

TIFFANY L. PARKS
Special to the Legal News
Published: October 21, 2014

The Ohio Restaurant Association has endorsed a bill that would create a refundable income tax or commercial activity tax credit for a business that donates food inventory to charitable organizations.

The refund would be equal to a percentage of a federal income tax deduction taken by the business for the same donation.

“Hunger is very real in our state,” said Richard Mason, ORA director of government affairs. “Ohio’s network of 12 regional food banks does an incredible job helping more than 3,300 local agencies provide food to many of those in need. The problem is that there is simply not enough donated food to meet the need.”

In pushing for the passage of House Bill 230, Mason said national statistics indicate that there is plenty of food to feed all Americans.

“Unfortunately too much of that food, more than 33 million tons annually, is wasted,” he said. “It ends up comprising about 18 percent of the solid waste in our landfills.”

HB 230, sponsored by Reps. Cheryl Grossman, R-Grove City, and Marlene Anielski, R-Walton Hills, would establish tax credits for businesses that make charitable contributions of “apparently wholesome food” from its inventory to a 501(c)(3) organization.

Under federal law, “apparently wholesome food” is food that meets all quality and labeling standards imposed by federal, state and local laws and regulations even though that food may not be readily marketable because of the food’s appearance, age, freshness, grade, size, surplus or other conditions.

“According to the National Restaurant Association, a majority of our nation’s restaurants donate food each year, the reality is that far too much wholesome restaurant food is thrown away,” Mason said. “There are a variety of reasons for this — government paperwork, additional staff training, extra food handling, storage and delivery costs. Sometimes, simply, a lack of understanding of the law is all that limits donations.”

Mason said the ORA wants to be a part of the conversation and become a part of the solution of addressing hunger within the state.

“The Ohio Restaurant Association supports HB 230 because we believe it will provide an additional incentive for restaurants to start or maintain consistent food donation programs,” he said.

While all donated food is helpful, Mason said the donation of prepared foods has important benefits.

“Receiving agencies have to invest less time and resources to get the food ready for their clients. Instead, they can use those resources to expand hunger relief and social service programs in their communities,” he said, adding that restaurants could also benefit from the bill’s passage.

“Additional tax savings, while modest, are savings nonetheless. In addition, donating food helps restaurants identify and minimize sources of waste, reduces waste disposal costs, creates positive public relations opportunities and, most importantly, provides a direct benefit to those in need.”

HB 230 is before the House Ways and Means Committee.

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