Despite good intentions, sometimes a restaurant just doesn’t get an order right. Maybe the server misheard the customer or took the order down incorrectly. Maybe the kitchen was overwhelmed and just didn’t execute properly. Whatever the cause, sometimes it's just better to send the order back and try again.
Such is the case with the recent tax bill. President Trump’s signature Big Beautiful Bill. If you remember, the mega-bill passed out of Congress in record time, largely outside of the normal process of committee scrutiny. And not surprisingly, the bill is rife with errors, mistakes and miscalculations and parts of it need to be sent back to the kitchen for a do-over.
Of the hundreds of tax provisions covered by the bill, one in particular has the potential to profoundly impact the industry’s participation in food donation programs across the country.
In an effort to encourage individual charitable contributions, especially for those with modest incomes, the bill doubles the standard tax deduction an individual can claim on their taxes. That in itself is a laudable goal.
However, to minimize the overall financial impact of the bill and not add to the deficit, bill writers needed an offset—a “pay for”—to make up that gap. To that end, significant changes were made to the laws governing corporate charitable contributions.
Beginning in 2026, corporations can only deduct charitable contributions that exceed 1% of their taxable income meaning a company with $100 million in taxable income can only deduct donations above $1 million.
This so-called “1% Charitable Deduction Floor” was designed for cash and stock donations, but because of how the law was written, it also applies to in-kind donations. In the case of many businesses in the restaurant, grocery, convenience store and hotel industries, a significant part of their overall charitable contributions come in the form of food donation.
But most surplus food donations don’t add up to 1% of a company’s income, meaning many businesses won’t get a charitable deduction at all for donating food. However, if that same food is thrown away, companies can still claim a business loss deduction (which has no floor). The bottom line is that the tax code now makes it cheaper to waste food—literally throw it in the dumpster—than to donate it. Clearly this was unforeseen by authors of the bill, yet this unintended consequence has huge ramifications not only for the restaurants and other entities that donate food, but for the national network of food pantries and service organizations throughout the country serving those in need in our communities.
It couldn’t be coming at a worse time. Food Insecurity across the country is at near record levels and according to Feeding America, 47 million Americans, including 13 million children, are food insecure. But many in the restaurant and grocery industries have long-standing commitments to address the problem.
For example, Food Donation Connection helps rescue over 60 million pounds of food each year through more than 20,000 restaurant and retail locations nationwide. Darden has donated 146 million pounds of food through its Harvest program, Chick–fil-A has donated 42 million meals through its Shared Table program and Publix has donated more than one billion pounds of food through its Good Together program. And the list goes on.
All this progress could be at risk if not addressed. Fortunately, many of our industry partners and trade association leaders like the National Restaurant Association have recognized this problem and are working with lawmakers to address it.
Additionally, the Coalition to Protect Food Donations, a partnership of businesses, nonprofits, community organizations, and the frontline hunger relief networks of food banks, pantries, and faith-based charities, has been established to help lawmakers understand the impacts of these changes to their communities and their constituents.
This is an important issue to our industry and our communities. Millions of our neighbors are depending on these programs to feed their families and the non-profit organizations doing the hard work in our communities depend on their partnerships with our industry and others to serve those in need.
A small tweak to the new law exempting food donations would provide the security this fragile network relies on to continue their efforts. We don’t need to reset the whole table. The overall bill contains numerous important changes that the industry has long sought. We just need to send this one part back to the kitchen to get it just right.
Joe Kefauver is the managing partner of Align Public Strategies and the cohost of the Working Lunch podcast, which runs weekly on Restaurant Business.
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