Business Corner

Donating can give you a federal income tax deduction

The National Association for the Exchange of Industrial Resources (NAEIR) wants your excess, obsolete or discontinued merchandise. Why? NAEIR can help your company accomplish a lot by taking it off your hands.

First, donating your excess inventory can help your company reduce taxes. Your company can earn an above cost federal income tax deduction under Section 170 (e)(3) of the U.S. Internal Revenue Code. Regular C corporations may deduct the cost of the goods donated, plus half of the difference between cost and fair market value. Deductions may be up to twice cost.

Secondly, you can free up warehouse space that could be used more efficiently to store your best selling products. You could clear out a large volume of inventory and stop paying leasing, insurance, and other warehouse expenses altogether. If you plan to close or consolidate a warehouse or distribution center, it may be more cost-effective to donate that inventory rather than move it to another location.

Third, you can avoid liquidation problems. Liquidating can often result in just cents on the dollar and sometimes the liquidator can be slow in making a payment. Your products may also end up in cut-rate discount houses hurting your product’s image and affecting future marketing efforts.

Finally, donating these products can fulfill your company’s philanthropic goals and translate into good will. Many companies have a program in place for donating to great causes such as schools or nonprofits locally or nationwide. NAEIR has over 13,000 member organizations across the country that would receive your generous donations.

NAEIR is a 501 (c)(3) nonprofit organization that has collected and redistributed over $2 billion worth of donated supplies since 1977.

There are many reasons to donate your excess inventory to NAEIR, so to get the process started and to receive a FREE Donation Information Kit, contact the Corporate Relations Department at 1-800-562-0955 or e-mail donor@naeir.org.

Reprinted from Floor Care Professional, August 2008