Income taxation: credits: voluntary contributions: food bank donations

The law preserves incentives for agricultural producers and food businesses to donate eligible food to California food banks through 2031. It also keeps the Emergency Food for Families Voluntary Tax Contribution Fund available through 2032, subject to its annual contribution threshold.

What the law does ​

• Extends through tax years beginning before January 1, 2032, a credit worth 15% of the qualified value of eligible food donated to California food banks.
• Covers qualifying growers, raisers, harvesters, packers, and processors, but not retailers, that donate specified produce, agricultural products, and processed foods.
• Continues the credit’s reporting requirement, requiring the Franchise Tax Board to report its use and donation data to the Legislature through December 1, 2030.
• Extends the Emergency Food for Families Voluntary Tax Contribution Fund through 2032, unless estimated annual contributions fall below $250,000.
• Takes effect immediately.

Who it affects ​

• Farmers and other eligible food producers, packers, and processors that donate qualifying food to California food banks.
• California food banks receiving donations and issuing donation certificates.
• Individual taxpayers who may voluntarily contribute to the Emergency Food for Families Voluntary Tax Contribution Fund on their state tax returns.

Context ​

The credit and contribution program were scheduled to expire sooner; this law extends them in response to food insecurity concerns.

Breakdown ​

Food Bank Donation Credit Extension ​

SB 881 extends the tax credit for qualified donations of fresh produce and certain agricultural or processed food products to food banks. The credit, equal to 15% of the donated food's qualified value, will be available for tax years beginning before January 1, 2032, rather than ending before 2027. The bill also extends the Franchise Tax Board's reporting on use of the credit through January 1, 2031.

Key takeaways

• The bill extends the food bank donation tax credit for five additional years, through tax years beginning before January 1, 2032.
• Qualified taxpayers may continue to claim a credit equal to 15% of the qualified value of eligible food donated to a food bank.
• Eligible donations include fresh fruits and vegetables and certain raw agricultural products or processed foods.
• The Franchise Tax Board must continue reporting to the Legislature each year on use of the credit until January 1, 2031.

Food Bank Tax Contribution Fund ​

This bill keeps the Emergency Food for Families Voluntary Tax Contribution Fund in place for seven more years. It extends the fund’s rules through January 1, 2033, instead of allowing them to end in 2026. The bill also makes a technical update that does not change the law’s substance.

Key takeaways

• Taxpayers may continue to make voluntary contributions through their personal income tax returns to support the Emergency Food for Families Voluntary Tax Contribution Fund.
• The bill extends the fund’s governing provisions from January 1, 2026, to January 1, 2033.
• The bill makes a nonsubstantive technical change reflecting existing law.
• Because the fund is continuously appropriated, extending it constitutes an appropriation.