2023 -- H 5803

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LC001865

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO TAXATION -- TAX CREDIT FOR FOOD DONATION

     Introduced By: Representatives McEntee, Cortvriend, Fogarty, Edwards, Bennett,
Morales, Caldwell, Dawson, Sanchez, and J. Lombardi

     Date Introduced: February 22, 2023

     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" includes

food that is not readily marketable due to appearance; age; freshness, including bearing a past-date

quality date, sell-by date, or other date; grade; size; surplus; or other condition. "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.

     (3) “Department” means the department of revenue.

     (4) "Nonprofit organization" means an incorporated or unincorporated entity that:

     (i) Is operating for religious, charitable, or educational purposes; and

     (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.

     (5) "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, 2024, 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

percent (75%) 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, 2024, 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 percent (50%) 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.

     (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 sold to the needy or

other nonprofit organizations that intend to use the food to provide food to the needy at a charge

sufficient only to cover the cost of transporting and handling such food.

     (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.

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

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

and procedures prescribed by the department.

     (f) The amount of the credit claimed under subsections (a) and (b) of this section 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.

     (g) 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.

     (h) The department shall be authorized to develop guidelines or regulations implementing

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

allocation of tax credits among qualified taxpayers. 

     (i) Using information available to the department, and as provided pursuant to subsection

(e) of this section, the department shall report to the general assembly, annually, regarding the use

of the credit authorized under this section. 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.

     SECTION 2. This act shall take effect upon passage.

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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.

     This act would take effect upon passage.

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