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Bill Calls for Tax Incentives to Aid Midwest Flood Victims

(July 28, 2008) A new bill in Congress would give federal tax relief for charitable donations that aid the Midwest following the catastrophic flooding and tornados in that region.

The bill would allow individuals and corporations to get unlimited charitable deductions for donations to relief efforts in the affected areas through the end of 2008.

Individuals and businesses located in presidentially-declared disaster areas due to floods, tornados and severe storms in Iowa, Arkansas, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska and Wisconsin would be eligible for the Midwestern Tax Relief Act of 2008.

The bill was introduced in the U.S. Senate by Iowa senators Chuck Grassley (R-Iowa) and Tom Harkin (D-Iowa) and in the U.S. House of Representatives by Midwest congressmen Dave Loebsack, Tom Latham, Leonard Boswell, Bruce Braley and Steve King.

According to The Chronicle of Philanthropy, the bill would also allow people who use their vehicles for disaster relief to deduct 41 cents per mile — or about 70 percent of the current business mileage rate through the end of 2009. The rates now are 14 cents per mile for charitable activities and 58.5 cents for business activities.

Volunteers could also exclude from their income reimbursements from charities for use of their vehicles up to the amount of the standard business rate through the end of 2009.

The bill, S. 3322, would also extend through 2009 provisions that expired at the end of 2007 that allow a variety of businesses, such as restaurants, grocery stores, or farms, to earn an “enhanced deduction” for donating surplus food to charity, according to the Chronicle.

AFP will be monitoring the progress of the Midwestern Tax Relief Act of 2008 and will notify members in the coming weeks of actions they can take to speed the passage of this bill.

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