The Senate advanced comprehensive tax reform legislation over the weekend with major ICBA-advocated improvements.
ICBA thanks community bankers for their grassroots advocacy, which helped to significantly improve the Tax Cuts and Jobs Act’s (H.R. 1) treatment of Subchapter S community banks, non-qualified deferred compensation plans, mortgage-servicing rights, and more.
In a statement, ICBA said it is encouraged by the continued momentum for pro-growth tax reform and supports many of the tax relief provisions of the House and Senate bills, including lowering the top C-corp rate from 35 percent to 20 percent, providing estate and individual rate relief, and reducing the alternative minimum tax.
Following outreach by ICBA and community bankers, the House and Senate bills create a carve-out for small-business borrowers from limits on the deduction for business interest expenses, and they preserve the current tax treatment for non-qualified deferred compensation plans and mortgage-servicing assets.
Further, the Senate bill preserves the mortgage interest deduction, while the House bill would limit it to $500,000 of indebtedness on new home purchases and grandfather current mortgages.
ICBA also worked closely with Subchapter S community banks to ensure the Senate bill provided significant S-corp tax relief, lowering the effective S-corp tax rate by providing a 23 percent deduction for qualified business income.
However, ICBA remains concerned that the bills do not address the disparity between taxpaying community banks and tax-exempt credit unions and the Farm Credit System.
As the House and Senate proceed to conference, ICBA will continue working with policymakers to ensure pro-growth tax reform that benefits community banks and the communities they serve.
Read ICBA Release ›