New Legislation - Credit for Fresh Fruits or Fresh Vegetables Donations
Beginning January 1, 2012, qualified taxpayers may receive a tax credit for donations to California food banks. Thanks to Assembly Bill 152, donating fresh fruits or fresh vegetables may entitle the donor to a credit equal to 10 percent of the donation’s costs. According to the author’s office, the purpose of this bill is to increase access to fresh produce for families that are “food insecure.”
A “qualified taxpayer” would be defined as the person responsible for planting the crop, managing the crop, and harvesting the crop from the land. The cost of donated fresh fruits or fresh vegetables would be the cost of those products that would otherwise be included in inventory costs. Generally, inventory costs would include both the direct costs and the allocated indirect costs required to produce the fresh fruits or fresh vegetables. Because inventory costs are a cost of doing business, the credit would be available only to a business that is also a qualified taxpayer.
The recipient of a donation of fresh fruits or fresh vegetables would be required to provide to the donor certification of the type and quantity of the products donated, the name of the donor or donors, the name and address of the donee nonprofit organization, and, as provided by the donor, the estimated value of the donated products and the location where the donated product was grown. The donor would be required to provide the certification to us upon request.
This credit is nonrefundable; however, it may be carried forward for six years. For more information on this new law, see our AB 152 complete analysis.