Details of Public Law 119-21, section 70305 , One Big Beautiful Bill Act

A deduction for 50 percent of the expenses of the employer associated with providing food and beverages to employees through an eating facility that meets requirements for de minimis fringes and for the convenience of the employer was previously allowed under the Tax Cuts and Jobs Act (Public Law 115-97, section 13304) for amounts paid or incurred after December 31, 2017 and before January 1, 2026.

The provision provides an exception to allow the deduction for expenses of goods and services sold by the employer as entertainment to customers or for food or beverages provided to crew members of a commercial vessel.

The provision allows a full deduction for meal expenses provided to crew members of a fishing vessel, fish processing vessel, or fish tender vessel, or at a facility that processes fish for commercial use or consumption located in the United States north of 50 degrees latitude north and not located in a metropolitan statistical area, including for the expenses of the employer associated with providing food and beverages to employees through an eating facility that meets requirements for de minimis fringes and for the convenience of the employer.

California conforms, under the PITL and the CTL, to the federal rules for the deductibility of fringe benefits under IRC section 274, as of the specified date of January 1, 2025, but does not conform to the federal law relating to the deduction disallowance for entertainment, amusement, or recreation that is directly related to the active conduct of a trade or business. Additionally, California does not conform to federal law relating to the deduction for meal expenses provided to crew members on a fishing vessel. As a result, California does not conform to the federal modifications made under this provision.