Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 42 - Adjustments to Computed Tax and Tax Credits › Rule 701-42.51 - From Farm to Food Donation Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Effective for tax years beginning on or after January 1,
				  2014, a taxpayer that donates a food commodity that the taxpayer produces may
				  claim a tax credit for Iowa individual income tax. The credit is equal to 15
				  percent of the value of the commodities donated during the tax year for which
				  the credit is claimed or $5,000, whichever is less. The value of the
				  commodities shall be determined in the same manner as a charitable contribution
				  of food for federal tax purposes under Section 170(e)(3)(C) of the Internal
				  Revenue Code.
To qualify for the tax credit, the taxpayer (1) must produce
				  the donated food commodity; (2) must transfer title to the donated food
				  commodity to an Iowa food bank or Iowa emergency feeding organization
				  recognized by the department; and (3) shall not receive remuneration for the
				  transfer. The donated food commodity cannot be damaged or out-of-condition and
				  declared to be unfit for human consumption by a federal, state, or local health
				  official. A food commodity that meets the requirements for donated foods
				  pursuant to the federal Emergency Food Assistance Program satisfies this
				  requirement.
To be recognized by the department, a food bank or emergency
				  feeding organization must either be a recognized affiliate of one of the eight
				  partner food banks with the Iowa Food Bank Association or must register with
				  the department. To register with the department, the organization must meet the
				  definition of "emergency feeding organization," "food bank," or "food pantry"
				  as defined by the department of human services in
				  441-661. (234). The
				  department of revenue will make registration forms available on the
				  department's Web site. The department will maintain a list of recognized
				  organizations on the department's Web site.
Food banks and emergency feeding organizations that receive
				  eligible donations shall be required to issue receipts in a format prescribed
				  by the department for all donations received and must annually submit to the
				  department a receipt log of all the receipts issued during the tax year. The
				  receipt log must be submitted in the form of a spreadsheet with column
				  specifications as provided by the department. Receipt logs showing the
				  donations for the previous calendar year must be delivered electronically or
				  mailed to the department postmarked by January 15 of each year. If a receipt
				  for a taxpayer's claim is not provided by the organization, the taxpayer's
				  claim will be denied.
To claim the credit, a taxpayer shall submit to the
				  department the original receipts that were issued by the food bank or emergency
				  feeding organization. The receipt must include quantity information completed
				  by the food bank or emergency feeding organization, taxpayer information, and a
				  donation valuation consistent with Section 170(e)(3)(C) of the Internal Revenue
				  Code completed by the taxpayer. Claims must be postmarked on or before January
				  15 of the year following the tax year for which the claim is requested. Once
				  the department verifies the amount of the tax credit, a letter will be sent to
				  the taxpayer providing the amount of the tax credit and a tax credit
				  certificate number.
Any credit in excess of the tax liability for the tax year
				  may be credited to the tax liability for the following five years or until
				  used, whichever is earlier. The tax credit shall not be carried back to a tax
				  year prior to the year in which the owner redeems the credit. The credit is not
				  transferable to any other person other than the taxpayer's estate or trust upon
				  the death of the taxpayer.
If the producer is a partnership, limited liability company,
				  S corporation, estate or trust electing to have the income taxed directly to
				  the individual, an individual may claim the credit. The amount claimed by an
				  individual must be based on the individual's pro-rata share of the individual's
				  earnings of the partnership, limited liability company, S corporation, or
				  estate or trust.
This rule is intended to implement 2013 Iowa Acts, Senate
				  File 452, division XVIII.