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Path ACT Calculator to help discover $14B of tax write-offs

Path ACT Calculator to help discover $14B of tax write-offs


On the heels of the December 2015 PATH Act, Bullpen Food has released its online calculator to evaluate the trade-offs between donating and selling excess food inventory. This new tool includes support for the recently passed, 231-page federal tax legislation called the PATH Act that extends existing “enhanced deduction” tax code for food companies. Enhanced deductions allow companies to deduct up to twice the standard amount for donations they make to food banks and related charities.
Previously, these types of deductions were only available to the largest corporations. The new PATH Act includes provisions allowing small and mid-size companies to enjoy the same benefits – a huge boon both to the food industry and to the 50 million Americans who are often uncertain where their next meal is going to come from.

However, these tax rules are complex and it is often unclear whether a donation or sale will yield a better outcome for a company. Companies must not only consider direct economic value, but also qualitative issues such as brand risk and goodwill that can tip the scales in favor of donation. Larger companies may also need to simultaneously evaluate multiple sell/donate opportunities to maximize overall business performance. The result of this complexity is that many companies simply throw up their hands and guess.

Now companies can use the interactive calculator found at bullpenfood.com/calculator to help answer their sell/donate questions. Requiring only eight inputs, the calculator creates recommendations by applying its knowledge of tax code and trade-offs between selling and donating. Results are delivered graphically with supporting text where appropriate and can be used on both computers and mobile devices. While Bullpen always recommends seeking professional tax counsel before making decisions, the calculator provides a simple and free way to explore each inventory situation.
“We work extensively with companies both to donate and to liquidate excess inventory, and we were a bit frustrated with the lack of good tools to rapidly evaluate these situations,” said Jon Brill, President of Bullpen Food. “Being located in the middle of the world’s technology capital we did the only thing we could – we built one. We’re now happy to share it with the world.”

Bullpen estimates the annual deduction opportunity to the food industry at around $14B based on the PATH Act’s deduction limit of 15% of a company’s pretax income. This delivers over $5B in annual tax savings to US food manufacturers and has the potential to add over one trillion dollars to the market capitalization of these companies over the next ten years – all the while improving the lives of the country’s most vulnerable.


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