In December 2015, Congress passed an expanded tax break that can benefit food businesses that donate food to hunger relief organizations for people in need while reducing food waste.
Previously, companies had to wait for Congress to annually renew the regulations that provided tax breaks for food donations. This uncertainty hampered the planning of food recovery and gleaning programs. If your business is a sole proprietorship, limited liability corporation, or other non C-Corp entity, you can take advantage of permanent regulations, an increased cap on donations, and other favorable changes to rules around food donations.
These regulatory incentives are intended to reduce food waste and increase distribution of food to needy populations. Despite the expanded incentives, manual donation processes, combined with logistics and communications challenges, often keep this supply from getting to local markets.
Ultimately, Local Orbit’s system will alert suppliers that a product is expiring, allowing them to communicate with local food banks that a product is ready to be donated or sold at a reduced price. This provides tracking of transactions right in the business management systems currently in use. Suppliers and food banks already work together to strengthen their local food economy. Adding a seamless donation process provides significant value to communities – expanding access to local food while providing tangible financial benefit through tax breaks.
Are you interested in reducing food waste, donating or increasing sales of seconds, and working with your local food bank in a more integrated way? We’d love to talk with you. Get in touch to learn how Local Orbit can help.
The New Food Economy offers more detail in its article, “An expanded tax break for food companies.” Additional information is available from the IRS. Search for “food inventory” for more information.