Title: Preserving Charitable Incentives Act
Policy area: Taxation

Summary:
Preserving Charitable Incentives Act
This bill increases the cap for corporate charitable tax deductions from 25% to 100% of a corporation's taxable income for taxable years beginning in 2020 and 2021. This increase encourages corporate donors (e.g., restaurants and retailers) to donate excess inventory rather than destroying it. The bill allows a carryover of excess inventory into the succeeding taxable year.
The bill also directs the Department of the Treasury to revise regulations with respect to the treatment of inventory as costs of goods sold for purposes of the charitable tax deduction.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8817 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8817

   To provide incentives to make charitable contributions of certain 
                               inventory.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 24, 2020

  Mr. Panetta (for himself and Mr. Smith of Nebraska) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To provide incentives to make charitable contributions of certain 
                               inventory.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preserving Charitable Incentives 
Act''.

SEC. 2. INCENTIVES TO MAKE CHARITABLE CONTRIBUTIONS OF CERTAIN 
              INVENTORY.

    (a) Temporary Increase in Limitation on Qualified Contributions.--
            (1) Suspension of current limitation.--Except as otherwise 
        provided in paragraph (2), qualified contributions shall be 
        disregarded in applying subsections (b)(2), (d), and 
        (e)(3)(C)(ii) of section 170 of the Internal Revenue Code of 
        1986.
            (2) Application of increased limitation.--For purposes of 
        section 170 of the Internal Revenue Code of 1986--
                    (A) Limitation.--Any qualified contribution shall 
                be allowed as a deduction only to the extent that the 
                aggregate of such contributions does not exceed the 
                excess of the taxpayer's taxable income (as determined 
                under paragraph (2) of section 170(b) of such Code) 
                over the amount of all other charitable contributions 
                allowed under such paragraph.
                    (B) Carryover.--If the aggregate amount of 
                qualified contributions made in the contribution year 
                (within the meaning of section 170(d)(2) of such Code) 
                exceeds the limitation of subparagraph (A), such excess 
                shall be appropriately taken into account under section 
                170(b)(2) of such Code subject to the limitations 
                thereof.
                    (C) Carryover of food inventory contributions.--If 
                the aggregate amount of qualified contributions 
                described in section 170(e)(3)(C)(i) of such Code made 
                in such contribution year exceeds the limitation of 
                subparagraph (A), such excess shall be appropriately 
                taken into account under section 170(e)(3)(C)(iii) of 
                such Code subject to the limitations thereof, and the 
                application of subparagraph (B) shall be adjusted 
                accordingly.
            (3) Qualified contributions.--For purposes of this 
        subsection, the term ``qualified contribution'' means any 
        qualified contribution (as defined in section 170(e)(3)(A) of 
        the Internal Revenue Code of 1986) which--
                    (A) is made during a taxable year of the 
                corporation which begins during 2020 or 2021, and
                    (B) does not consist of any drug or biological 
                product that requires a prescription of a physician for 
                its use by an individual.
            (4) Election.--A contribution shall be taken into account 
        as a qualified contribution for purposes of this subsection 
        only if the corporation elects (at such time and in such manner 
        as the Secretary may provide) the application of this 
        subsection with respect to such contribution.
    (b) Election To Treat Qualified Contributions as Made in Prior 
Taxable Year.--In the case of any qualified contribution (as defined in 
subsection (a)(3) and determined without regard to this subsection) 
made during the corporation's first taxable year beginning in 2020 with 
respect to which the corporation elects (as such time and in such 
manner as the Secretary may provide) the application of this 
subsection--
            (1) such contribution shall be treated as made in the 
        taxable year preceding such taxable year (and not in such 
        taxable year), and
            (2) such contribution shall not be treated as a qualified 
        contribution for purposes of subsection (a).
    (c) Clarification of Treatment of Inventory Costs.--The Secretary 
of the Treasury, or the Secretary's designee, shall clarify, though a 
notice or other administrative guidance, the treatment of inventory 
costs as cost of goods sold for purposes of section 170 of the Internal 
Revenue Code of 1986.
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