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Food Donation Tax Credit Slipped Into Last-Minute Bill in Kentucky General Assembly

U.S. Department of Agriculture
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Once-dead legislation that would allow Kentucky restaurants to claim a tax break for charitable food donations has been resurrected in the final days of this year’s legislative session.

The bill would provide restaurants with a tax refund worth 20 percent of the fair market value of food donated to charities.

It’s unclear how much the state would miss in revenue lost from the tax break. Jason Bailey, director for the Kentucky Center for Economic Policy, said that’s a problem.

“The bill has not been heard in committee so there’s been no public discussion on how much it costs and whether it’s worth the lost revenue,” Bailey said. “Any amount if we’re not having an open discussion about it is problematic.

The bill failed to land a committee hearing in the Democratic-led House earlier this year. Now the language has been tacked on to a different bill that is already poised to pass the state legislature.

The Courier-Journal reported that Louisville-based Yum! Brands had pushed for the bill earlier in the session and was responsible for its late revival.

Amber Cronen, intake coordinator with the Hope Center in Lexington, said restaurant donations are readily accepted at her organization.

“We can integrate the donations into the menu, which helps us alleviate some costs there; we can also build a menu around the donated items. It definitely does help,” Cronen said.

Jim Larson, a program development director with Food Donation Connection, which puts charities in touch with restaurants willing to donate food, said the tax break would encourage more businesses to donate.

“It’s easier to throw it out. But to properly package it and cool it and freeze it takes several more steps, and that’s why they need to have some sort of offset,” Larson said. “Rather than sending it to a landfill where it’s going to create greenhouse gases and that type of thing, it’s a good idea to probably save it and allow charities to collect it.”

Restaurants already earn a federal tax deduction on donated food.

The tax measure is another budget matter that the legislature is taking up in a non-budget year, raising questions about how private interests influence policy decisions.

The Courier-Journal article noted that Rep. Jim Wayne, a Louisville Democrat, failed to pass a tax break for soundproofing houses near airports—he was told that budget item could be taken up in the budgetary session next year.

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Ryland Barton is the Managing Editor for Collaboratives for Kentucky Public Radio, a group of public radio stations including WKMS, WFPL in Louisville, WEKU in Richmond and WKYU in Bowling Green. A native of Lexington, Ryland most recently served as the Capitol Reporter for Kentucky Public Radio. He has covered politics and state government for NPR member stations KWBU in Waco and KUT in Austin.
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