Newman’s Own saved from major tax hit
Newman’s Own Foundation, which donates proceeds from its salad dressing, pizza sauce and other products to charities, was saved last week from a 200 percent tax increase by a late minute amendment to the federal budget enacted by Congress.
U.S. Senators Richard Blumenthal, and Chris Murphy, both Connecticut Democrats, said the Westport-based foundation will be exempted from a tax provision that would have crippled the company.
Language included by the senators in the budget act relieves Newman’s Own Foundation and similar organizations from potential financial ruin, they said.
“Newman’s Own Foundation is a leader in philanthropy and business in Connecticut,” said the senators. “The foundation is a significant source of support for communities in our state and around the world. We worked hard to include this exemption from this catastrophic tax provision, and now the company can continue to thrive as a local and global force for good.”
A federal law preserved by December’s Republican tax bill stipulates that private foundations are prohibited from owning more than 20 percent of for-profit companies for more than five years. Because of its unique business structure, Newman’s Own would be subject to a 200 percent tax on the foundation’s assets, the senators said.
Blumenthal and Murphy said the language exempts Newman’s Own and similar organizations from the tax as long as all profits go to charity, the foundation is independently operated and all ownership interests were acquired under the terms of a will or trust.