Tax credit for food donations considered

The Revenue Committee heard testimony March 22 on a bill intended to incentivize food donations to Nebraska food banks and pantries.

Under LB524, introduced by Omaha Sen. John Fredrickson, Nebraska grocery store retailers and restaurants that donate food to those organizations would be eligible for a nonrefundable income tax credit equal to 50 percent of the wholesale value of the donated food.

A credit could not exceed $2,500, and total credits allocated each fiscal year could not exceed $1.75 million.

Fredrickson said encouraging more businesses to donate unused food would reduce food waste and alleviate food insecurity in Nebraska.

He said he would introduce an amendment under which donations made by agricultural producers and to food rescue organizations — which transport donated food to organizations that distribute emergency food supplies — also would qualify for the credit.

Ansley Fellers testified in support of LB524 on behalf of the Nebraska Grocery Industry Association, the Nebraska Hospitality Association and the Nebraska Chamber of Commerce and Industry.

Most Nebraska grocery stores and restaurants donate food that is nearing its sell-by date, she said, but in some cases it is less costly and labor intensive for retailers — especially smaller ones and those in rural areas — to discard expiring food. The proposed credit would help offset those costs, Fellers said.

Brian Barks testified in support of the bill on behalf of Food Bank for the Heartland and the Food Bank of Lincoln. He said the two organizations anticipate serving 40 percent more households this year than in 2020, when the pandemic began, because low-income families and seniors cannot afford “skyrocketing” food prices.

The Food Bank of the Heartland currently receives donated food from nearly 200 Nebraska retailers, manufacturers and processors, Barks said, but those donations, as well as assistance from the federal government, are not enough to meet demand for emergency food assistance.

“This bill would incent those companies to continue to support our work as well as grow new business partners to donate food in support of local communities and our neighbors in need,” he said.

No one testified in opposition to the bill and the committee took no immediate action on it.