HR3166-119

What This Bill Does

The Local Food Recycling and Regenerative Opportunities Act creates a new Internal Revenue Code section 25F credit for diverting wasted food. Individuals may claim a credit equal to 30 percent of the amount paid or incurred for qualified residential food recycling appliances and qualified residential organic waste services. Appliance credits are capped at 300 dollars per appliance, and service credits are capped at 120 dollars in the aggregate per taxable year. A qualifying appliance must be an electric appliance placed in service in the taxpayer's U.S. principal residence, separate food waste from trash, and pre-process inedible or uneaten food through dehydration and size reduction for landfill diversion. A qualifying service must collect locally generated organic waste, including appliance-preprocessed food waste, from the taxpayer's U.S. principal residence for local management and landfill diversion. No double tax benefit is allowed, basis is reduced by credited amounts, credits terminate for appliances or services acquired after December 31, 2031, and the rules apply to taxable years beginning after December 31, 2025.

Who Benefits and How

Households buying food recycling appliances benefit from a 30 percent credit capped at 300 dollars per appliance. Households subscribing to organic waste collection benefit from a 30 percent credit capped at 120 dollars per year. Food recycling appliance manufacturers benefit if the credit increases demand for qualifying home equipment. Local composting and organic waste service providers benefit from subsidized residential collection demand. Municipal waste programs benefit indirectly if more food waste is diverted from landfills.

Who Bears the Burden and How

IRS guidance staff must define, administer, and enforce the new section 25F credit. Taxpayers must track qualifying appliance and service expenses and avoid double benefits. Appliance retailers and service providers may need to document eligibility for customers. Treasury revenue accounts lose tax receipts from credits claimed through 2031.

Key Provisions

• Creates a 30 percent individual tax credit for residential food recycling appliances and organic waste services.
• Caps the appliance credit at 300 dollars per qualifying appliance.
• Caps the organic waste service credit at 120 dollars per taxable year.
• Defines eligible appliances and services by principal residence use, food waste separation, preprocessing, collection, local management, and landfill diversion.
• Terminates the credit for appliances or services acquired after December 31, 2031.