Income Tax - Subtraction Modification - Donations to Food Banks and Other Charitable Entities
Summary
SB935 creates a temporary Maryland income tax subtraction modification for certain donations of food or cash specifically designated to buy food that taxpayers make to qualifying charitable entities. The subtraction is capped at $1,000 per taxpayer per taxable year and applies to donations made to food banks, homeless shelters, domestic violence shelters, religious organizations, and other charitable organizations that register with the Comptroller as distributors of food provided at no charge to people in need. To claim the subtraction, taxpayers must include the recipient entity’s name, proof of the donation’s value, and any other information the Comptroller requires.
The bill also requires the Comptroller to adopt regulations governing the program, including registration criteria and procedures for qualifying charitable entities. It directs the Comptroller to report to the General Assembly by January 1, 2029, on whether these donations increased after the law took effect and whether the tax subtraction contributed to that increase. The measure is set to take effect July 1, 2026, apply to taxable years beginning after December 31, 2025, and expire June 30, 2029, unless reenacted.
Impact
SB935 would amend Maryland’s Tax-General Article by adding a new individual income tax subtraction under § 10-208(dd) and conforming the corporate subtraction provisions in § 10-308 so corporations can also benefit from the same type of deduction. In practical terms, it would reduce taxable income for eligible taxpayers who donate food or food-designated cash to approved charitable entities, potentially lowering state income tax liability while encouraging food assistance donations. It would also expand the Comptroller’s administrative role by requiring registration rules, documentation standards, and a legislative impact report.
Sentiment
Based on the bill text and available context, the measure appears generally supportive of charitable food assistance and tax incentives for donations, with no recorded committee testimony or vote history indicating opposition or amendment debate. The bill’s temporary design and reporting requirement suggest an effort to test whether the tax benefit actually increases donations before making it permanent. Overall, the available record reflects a policy-oriented, pro-charity approach rather than a contentious partisan issue.
Contention
The main points of potential contention are likely administrative and fiscal rather than ideological. Questions may arise about whether the $1,000 cap is sufficient, how the Comptroller will verify donation value and qualify entities, and whether the tax expenditure will meaningfully increase food donations enough to justify the revenue loss. Another possible issue is the scope of eligible organizations, since the bill includes a broad range of charitable entities but requires them to register with the Comptroller, which could create compliance burdens for smaller nonprofits.