Provides a tax credit for food donations by qualified taxpayers to nonprofit organizations up to five thousand dollars ($5,000) per year.
Summary
H5404 creates a new Rhode Island tax credit for donations of apparently wholesome food to qualifying nonprofit organizations. Beginning with taxable years on or after January 1, 2026, eligible taxpayers may claim a credit equal to 75% of the fair market value of donated food, up to $5,000 per year. The bill also creates a separate credit for transportation costs associated with moving donated food, equal to 50% of those costs, also capped at $5,000 per year, so long as the donor receives no monetary value in return.
The bill defines key terms such as “apparently wholesome food,” “qualified taxpayer,” and “nonprofit organization,” and limits the credit to donations used to provide food to needy individuals. It requires the recipient nonprofit to issue a certificate documenting the donation and compliance with the bill’s conditions, and it authorizes the Division of Taxation to adopt rules and regulations and to report annually to the General Assembly on use of the credit. The measure also amends Rhode Island’s personal income tax law to make the food donation credit an allowable credit against personal income tax, and it applies to several tax chapters affecting individuals and business entities.
Impact
If enacted, H5404 would add a new chapter to Title 44 establishing a food-donation tax incentive and would amend the personal income tax provisions to recognize that credit. It would affect individuals, businesses, farms, restaurants, grocers, schools, hospitals, and other entities that donate food, as well as nonprofit food distributors and charities that receive and distribute the food. The bill would also require administrative guidance from the Division of Taxation and annual reporting to the legislature on the amount and use of credits claimed.
Sentiment
Based on the bill text and available context, the measure appears generally supportive of food recovery and charitable donation efforts, with no recorded committee debate or votes showing opposition or amendment activity. The structure of the bill suggests a policy goal of encouraging donation of surplus food by offsetting some of the value and transportation costs through tax credits. Because there are no transcripts or votes provided, there is no documented public sentiment beyond the bill’s pro-donation design.
Contention
No specific points of contention are documented in the available committee materials or voting history. Potential issues inherent in the bill’s design include the fiscal cost of the credit, the administrative burden of verifying fair market value and nonprofit compliance, and whether the $5,000 annual cap and 75%/50% credit rates are sufficient to change behavior. Another possible area of concern is the bill’s reliance on nonprofit certification and Division of Taxation rules to prevent abuse or double counting of credits.