Chapter 12. Food Donation Program
Regulation .01 Purpose.LinkCopy Citation
In cooperation with the Comptroller, this chapter explains the Secretary of Agriculture’s Food Donation Program, which provides a tax credit against the State income tax for eligible food donations made by a farm located in Maryland.
Regulation .02 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Certified organic produce” means an eligible food donation that is certified under Title 10, Subtitle 14 of the Agriculture Article as an organically produced commodity.
(2)
“Eligible food donation” means fresh farm products for human consumption.
(3)
“Qualified farm” means a farm business that is located in Maryland.
(4)
“Secretary” means the Secretary of Agriculture or the Secretary’s designee.
(5)
“Tax Credit Certificate Administrator” or “TCCA” means a person or an organization that is authorized under this chapter to receive eligible food donations.
Regulation .03 Income Tax Credit Limitations.LinkCopy Citation
A.
Subject to the limitations of this chapter, a qualified farm may claim a credit against State income tax for an eligible food donation in the amount stated on any tax credit certificate issued to a qualified farm by a qualified tax credit certificate administrator (TCCA).
B.
The amount of tax credit claimed by a qualified farm is controlled by Tax-General Article, §10-745, Annotated Code of Maryland.
C.
Unless increased by the Secretary, the aggregate amount of credits for any taxable year for a qualified farm may not exceed $5,000.
Regulation .04 Tax Credit Certificate Administrator.LinkCopy Citation
A.
General Requirements.
(1)
Unless certified by the Secretary, a person or organization may not act as a TCCA. A certified TCCA shall agree in writing with the Secretary to comply with requirements of this chapter.
(2)
A TCCA certified by the Secretary that receives an eligible food donation from a qualified farm shall issue the qualified farm a tax credit certificate (the Secretary, in consultation with the Comptroller, is required to prepare tax certificate forms) that provides the following information:
(a)
The date of donation;
(b)
The identity of the qualified farm;
(c)
The type of donation;
(d)
The weight of the donation;
(e)
The value of the donation;
(f)
The maximum amount of the tax credit for which the qualified farm is eligible; and
(g)
Any other information the State Department of Agriculture or Comptroller requires.
(3)
Within 30 calendar days after issuing a tax credit certificate, the certified TCCA shall provide a copy of the tax credit certificate to the Secretary and the Comptroller.
(4)
When notified by the Secretary, the TCCA shall stop issuing tax credit certificates as required by Tax-General Article, §10-745(e)(6)(i)1, Annotated Code of Maryland.
(5)
Procedures for Issuing a Fiscal Year's Remaining Tax Credit Certificates.
(a)
After the Secretary notifies each TCCA to stop issuing tax credit certificates when the total amount of the tax credit certificates issued during the fiscal year equals or exceeds $50,000, the Secretary may authorize the issuance of any remaining credits as provided in this regulation.
(b)
Within 20 days from receipt of the Secretary's notification, a TCCA may request written permission from the Secretary to issue additional tax credit certificates during the current fiscal year, specifying the dollar amount in additional tax credits it seeks to issue and the basis for that request (e.g., to support its request, the TCCA may be requested by MDA to provide information indicating the amount of food donations by type that it has received and is likely to receive from qualified farms during the current fiscal year, and other such records showing that its request is reasonable).
(c)
The Secretary shall review each timely request from a TCCA in conjunction with other timely requests and assess whether the basis for the request is reasonable.
(d)
If the total dollar amount of the requests received from all TCCAs does not exceed $50,000, the Secretary may permit each TCCA to issue tax credits up to the amount specified in its request and will notify each TCCA of its determination in writing.
(e)
If the total dollar amount of the requests received from all TCCAs exceeds $50,000, the Secretary shall strive to distribute the additional tax credits to each TCCA for food donations from qualified farms in a fair and equitable manner.
(f)
If a TCCA recognizes that it will be unable to issue the tax credits that the Secretary has authorized under either §A(5)(d) or (e) of this regulation, it shall immediately notify the Secretary who will strive to distribute these certificates in a fair and equitable manner to those TCCAs still in need of additional tax credits.
B.
Tax Credit Value. The TCCA shall determine the value of the tax credit as follows:
(1)
A qualified farm that makes eligible food donations is eligible for a tax credit certificate with a stated tax credit amount equal to 100 percent of the value of eligible food donation.
(2)
A qualified farm that makes a donation of certified organic produce is eligible for a tax credit certificate with a stated tax credit amount equal to 100 percent of the value of the donated certified organic produce.
(3)
The TCCA shall determine the value of any eligible food donations based on the Secretary's weekly published categories and values of certified organic produce and food donations as required by Tax-General Article, §10-745(d), Annotated Code of Maryland.
C.
Record Requirement.
(1)
The TCCA shall maintain any records relating to the issuance of any tax credit certificate to any qualified farm.
(2)
Any record shall be maintained for 3 years and shall be available to the Secretary or the Comptroller upon request.
D.
Conflicts of Interest. A TCCA may not issue a tax credit certificate to any person who owns or operates a qualified farm if the TCCA has a business interest or is a family member of the owner or operator in the farm.
Regulation .05 Certification of Tax Credit Certificate Administrator.LinkCopy Citation
An applicant who applies to serve as a Tax Credit Certificate Administrator shall apply to the Secretary on a departmental form and shall have the following qualifications:
A.
Be a 501c3 nonprofit;
B.
Have record-keeping capabilities (information systems) that include the date of the donation, farm name/farmer, type of fresh farm product, and volume in pounds of produce received;
C.
Be certified in and comply with safe food handling practices and have been reviewed by an outside organization (i.e. health inspector, AIB certified);
D.
Possess a scale certified by the Maryland Department of Agriculture that is calibrated on a quarterly basis;
E.
Follow food safety regulations regarding storage and inventory; and
F.
Have an established partner network for quick food distribution or distribute directly to clients.
Regulation .06 Application Review and Approval.LinkCopy Citation
A.
The Secretary shall review each application and certify the most qualified applicants who will best promote the objectives of the Food Donation Pilot Program as described in this chapter.
B.
Upon approval of an application for certification, the certified applicant shall execute an agreement with the Secretary that describes the duties and responsibilities of a person or organization acting as a Tax Credit Certificate Administrator.
Regulation .07 Penalty.LinkCopy Citation
Upon notice and an opportunity to be heard, for any violation of this chapter, the Secretary may revoke or suspend the authority of any TCCA to issue a tax credit certificate for any qualified farm.
Chapter annotations
Authority: Tax-General Article, §10-745, Annotated Code of Maryland
History: Effective date:
History: Regulations .01—.07 adopted as an Emergency provision effective September 8, 2017 (44:20 Md. R. 944); emergency status expired effective January 3, 2018
History: Regulations .01—.07 adopted effective June 4, 2018 (45:11 Md. R. 579)
History: Regulation .01 amended effective April 6, 2020 (47:7 Md. R. 384); November 13, 2023 (50:22 Md. R. 978)
History: Regulation .02B amended effective April 6, 2020 (47:7 Md. R. 384)
History: Regulation .03 amended effective April 6, 2020 (47:7 Md. R. 384); November 13, 2023 (50:22 Md. R. 978)
History: Regulation .04A, B amended effective April 6, 2020 (47:7 Md. R. 384)
History: Regulation .04B amended effective November 13, 2023 (50:22 Md. R. 978)