An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for surplus donation farmer tax credit; and imposing duties on the Department of Community and Economic Development.

PRINTER'S NO. 2514
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1992
Session of
2025
INTRODUCED BY M. MACKENZIE, GALLAGHER, KUZMA, GAYDOS AND
ZIMMERMAN, OCTOBER 23, 2025
REFERRED TO COMMITTEE ON FINANCE, OCTOBER 24, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for surplus donation farmer tax credit;
and imposing duties on the Department of Community and
Economic Development.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XVIII-I
SURPLUS DONATION FARMER TAX CREDIT
Section 1801-I. Scope of article.
This article relates to a tax credit for farmers who donate
surplus agricultural products to a qualified food bank.
Section 1802-I. Definitions.
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The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Agricultural production." As defined in section 3 of the
act of June 30, 1981 (P.L.128, No.43), known as the Agricultural
Area Security Law.
"Agricultural products." Crops and livestock products.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Eligible taxpayer." A farmer who engages in agricultural
production within the borders of this Commonwealth and donates
agricultural products to a qualified food bank.
"Farmer." A person who is engaged in the active use,
management and operation of real and personal property for
agricultural production.
"Qualified food bank." A charitable food organization
enrolled in the Pennsylvania Agricultural Surplus System.
"Tax credit." A tax credit established under this article.
Section 1803-I. Procedure.
(a) Tax credit allowed.-- An eligible taxpayer may claim a
tax credit against the tax due under Article III for the
donation of agricultural products to a qualified food bank. The
tax credit for a taxable year shall be the least of the
following:
(1) 100% of the sale price of the donated agricultural
products.
(2) The fair market value of the donated agricultural
products.
(3) $20,000.
(b) Application and certification.--
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(1) A tax credit may be claimed only after approval and
certification by the department and shall be limited to the
amount stated on the certificate issued under section 1804-
I(a).
(2) An eligible taxpayer must apply to the department
for a tax credit in a form and manner specified by the
department. The application shall include all of the
following:
(i) Reasonable proof of the total amount and type of
agricultural products donated to the qualified food bank
during the taxable year.
(ii) Identification of the qualified food bank that
received the donation.
(iii) Verification and documentation necessary to
meet other eligibility requirements as established by the
department.
(3) A donation of agricultural products must be
acknowledged in writing by the qualified food bank and the
acknowledgment shall be submitted with the application.
(c) Duration and use of tax credit.-- A tax credit shall be
limited to the liability for tax computed under Article III for
the taxable year.
(d) Limitations.-- A tax credit may not be sold, assigned,
passed through, carried back or refunded. A tax credit may be
carried forward for one taxable year and may be used only to the
extent it cannot be used for the taxable year for which it is
first approved. A tax credit may not be applied against tax
withheld by an employer from an employee under Article III.
Section 1804-I. Approval of tax credit.
(a) Review.-- The department shall review applications for a
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tax credit and, in consultation with the Department of
Agriculture, shall issue certificates for approved tax credits.
(b) Tax clearance.-- Before approval, the Department of
Revenue shall determine that the applicant has filed all
required State tax reports and returns for all applicable
taxable years and has paid any balance of State tax due as
determined at settlement or assessment or as otherwise
determined by the Department of Revenue.
Section 1805-I. Departmental duties.
(a) Administration.-- The department shall administer this
article, promulgate regulations and publish the forms necessary
to implement this article. The department shall share
information with the Department of Revenue to the extent
necessary to administer this article and Article III and may
consult and exchange information with the Department of
Agriculture to verify eligibility and donations.
(b) Limitation on amount.--
(1) The department may allocate no more than $5,000,000
in tax credits for the taxable year beginning after December
31, 2025.
(2) The department shall allocate tax credits on a
first-come, first-served basis beginning on January 1 of each
year.
Section 1806-I. Report.
(a) Duty to report.-- No later than February 1, 2030, the
department, in consultation with the Department of Revenue,
shall provide a report to the General Assembly on the tax
credits issued for taxable years beginning after December 31,
2025.
(b) Contents of report.-- The report shall include all of the
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following:
(1) Background information on eligible taxpayers and
other information the department finds relevant to evaluating
the effect of the tax credits on charitable donations of
agricultural products.
(2) The number and amount of tax credits issued.
(3) The geographic distribution of tax credits issued.
(4) The types of agricultural products most commonly
donated by eligible taxpayers.
(5) The number and amount of tax credits disallowed.
(6) The number and amount of tax credit applications
that exceeded the allocation available in each year.
Section 1807-I. Expiration.
The department may not approve applications for a tax credit
under this article for taxable years beginning after December
31, 2035.
Section 1808-I. Applicability.
This article shall apply to taxable years beginning after
December 31, 2025.
Section 2. This act shall take effect immediately.
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