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Tax incentive off to slow start

BY ALEKSANDRA VUJICIC | NOVEMBER 18, 2014 5:00 AM

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A new tax credit is creating an incentive for farmers to get more locally grown produce on food-pantry shelves.

But one Iowa City food pantry has only seen two farmers take advantage of the program so far.

The Farm to Food Donation Tax Credit Program allows farmers who donate their self-produced commodities to food banks and food pantries to qualify for credit on state taxes. The program was approved by the Iowa Legislature in 2013 and will be effective beginning January 2015.

The program will be effective for tax years starting next year, which means this past year’s donations can be claimed in January.

Kate Edwards of Wild Woods Farm in Solon said she is looking into the program for next year, but she already donates excess produce to food pantries once or twice a week without a tax credit incentive.

“The tax credit is a nice nod from the government, saying that ‘we appreciate what you’re doing,’ but it has nothing to do with why I donate food,” Edwards said.

She said she thinks it’ll probably take time to get the word out and get this new program worked into the system.

The credit is equal to 15 percent of the value of the produce donated within the tax year, or a $5,000 cap, whichever is less.

If producers take advantage of this program, they will receive a authorized receipt from a registered Iowa food bank and submit that to the Iowa Department of Revenue by Jan. 15.

Sarah Benson Wintry, the Food Bank and emergency-assistance director at the Crisis Center, said it has only had two farmers take advantage of this tax credit this year.

“I think there are still some hurdles for farmers in understanding how this could benefit them,” she said. 

The lag in responsiveness is something Benson Witry said should be expected, because it may take years for new programs to catch on and for people to decide whether it might benefit them.

She said the tax credit could encourage farmers to donate products they are having trouble selling at market instead of composting or wasting the food.

Edwards said even though she donates without any tax credit incentives, the value of the credit might not be enough for some farmers.

“Unfortunately, because it’s only 15 percent, it’s not necessarily going to make a large impact, but I appreciate the concept behind it,” Edwards said. “I would like to see the percent increase. If it’s a good product, it should be a 100 percent tax credit.”

Benson Witry said the Food Bank had quite a few farmers donating fresh produce this year, along with several community gardens contributing.

“Just because we didn’t have that many farmers take advantage of the tax credit does not mean we did not get a lot of donations,” Benson Witry said. “We had thousands of pounds of produce.”

Dustin Vande Hoef, the communications director for the Iowa Department of Agriculture and Land Stewardship, said this program might offer incentives tax deductions don’t by allowing some tax credits to transfer to future years.

Edwards said she knows of farmers who have been donating for 20 years, and she doesn’t look at donations from a financial point of view. 

“We’re not going to change our ways because of the tax credit,” Edwards said. “We’ve been doing this, and we’ll continue to do it.”


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