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AB-2768 Income and corporation taxes: credit: donation of food.(2015-2016)

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Amended  IN  Assembly  May 16, 2016

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Assembly Bill
No. 2768

Introduced by Assembly Member Thurmond
(Coauthors: Assembly Members Dababneh and Rodriguez)
(Coauthors: Senators Hueso and Mendoza)

February 19, 2016

An act to add and repeal Sections 17053.90 and 23690 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2768, as amended, Thurmond. Income and corporation taxes: credit: donation of food.
The Personal Income Tax Law and the Bank and Corporation Tax Law allow various credits against the taxes imposed by those laws, including a credit for a farmer to donate fresh foods and vegetables to a food bank.
This bill would allow a credit against those taxes for each taxable year, beginning on and after January 1, 2017, and before January 1, 2023, to a taxpayer that donates qualified food, as defined, of its trade or business to an organization located in California and exempt from federal income taxation, as specified.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares the following:
(a) One out of every seven Californians does not know where his or her next meal will come from.
(b) Two million three hundred thousand children in California are food insecure, with one in four children going to bed hungry each night.
(c) Although CalFresh is the state’s most effective program to address hunger in the state, serving 4,500,000 Californians, the state’s federal waiver to the three-month time limit for the federal Able Bodied Adults Without Dependents in the Supplementary Nutrition Assistance Program, known in California as CalFresh, will expire in 2017. The expiration of the federal waiver is expected to increase demand on local direct service organizations serving food prepared for human consumption.
(d) California has been a leader in public-private partnerships to reduce hunger. Examples of these partnerships include the CalFresh Restaurant Meals Program and the California Association of Food Banks’ Farm to Family program.
(e) Given the growing need for hunger relief, restaurants and grocers are trying to find a better way to redirect excess food to the hungry, instead of landfills.

SEC. 2.

 Section 17053.90 is added to the Revenue and Taxation Code, to read:

17053.90.
 (a) For taxable years beginning on or after January 1, 2017, and before January 1, 2023, in the case of a taxpayer that donates qualified food of its trade or business to an organization located in California that is exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 10 percent of the fair market value of the contribution.
(b) For purposes of this section, “qualified food” means prepackaged food, as defined in Section 113876 of Health and Safety Code, and or food prepared for immediate human consumption, including unspoiled fruits and vegetables.
(c) A deduction or credit shall not be allowed under this part for amounts taken into account under this section in calculating the credit allowed by this section.

(d)In the case where the credit allowed under this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and for the eight succeeding years, if necessary, until the credit has been exhausted.

(d) The credit allowed by this section may be claimed only on a timely filed original return.
(e) This section shall be repealed on December 1, 2023.

SEC. 3.

 Section 23690 is added to the Revenue and Taxation Code, to read:

23690.
 (a) For taxable years beginning on or after January 1, 2017, and before January 1, 2023, in the case of a taxpayer that donates qualified food from of its trade or business to an organization located in California that is exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to 15 10 percent of the fair market value of the contribution.
(b) For purposes of this section, “qualified food” means prepackaged food, as defined in Section 113876 of Health and Safety Code, and or food prepared for immediate human consumption, including unspoiled fruits and vegetables.
(c) A deduction or credit shall not be allowed under this part for amounts taken into account under this section in calculating the credit allowed by this section.

(d)In the case where the credit allowed under this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and for the eight succeeding years, if necessary, until the credit has been exhausted.

(d) The credit allowed by this section may be claimed only on a timely filed original return.
(e) This section shall be repealed on December 1, 2023.

SEC. 4.

 It is the intent of the Legislature to comply with Section 41 of the Revenue and Taxation Code.

SEC. 5.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.