Approximately 82,000 people visit a food shelf in the state at least once a week; nearly double the number since 2005.
Newell Searle, vice president for Second Harvest Heartland, a regional food bank, told the House Taxes Committee that HF505 would provide a mechanism to increase the amount of fresh produce available at food shelves.
Sponsored by Committee Chairman Greg Davids (R-Preston), the bill would allow producers of agricultural products to write-off the value of the product, not just the cost of production, and it would expand the benefit to not only C corporations. The bill was held over for possible omnibus bill inclusion. It has no Senate companion.
“This levels the playing field for all donors. It would allow them to deduct part of the fair market value of the crop that they might otherwise just plow under, or in the case of apples, just let fall to the ground,” Searle said.
Under current general charitable contribution rules, a business contributing inventory is limited to deducting an amount equal to its cost of creating the inventory or the fair market value, whichever is less. There are also rules that allow C corporations to deduct a larger amount. The bill would provide some partnerships and sole proprietors the same deduction.
This change would conform the state to a temporary federal tax provision for years 2010 and 2011. However, the Minnesota change has no expiration date.
“This is an opportunity to connect farmers with those who need the produce,” Searle said. “It provides an incentive to them to recover some of the costs of producing bagging and transporting which can be more than they can absorb.”