FOR IMMEDIATE RELEASE
ICBA Commends Small Business Tax Package Compromise; Helpful Subchapter S Tax Relief Preserved
Washington, D.C. (April 25, 2007)—The Independent Community Bankers of America (ICBA) praised House and Senate conferees for agreeing to a $4.84 billion small business tax relief package that includes much-needed small business tax reform. Notably, ICBA-endorsed reforms to improve section 179 small business expensing and beneficial Subchapter S tax provisions are part of the scaled-down tax package compromise currently moving through Congress.
"The tax package contains provisions that will ease the tax burden of millions of small businesses and community banks across the country," said James P. Ghiglieri, ICBA chairman and president of Alpha Community Bank, Toluca, Ill. "Subchapter S status is a proven means for small businesses such as community banks to improve their viability, and most importantly allow them to better support their employees, customers, and communities."
Key ICBA-backed Subchapter S tax reforms in the package include:
- Excluding capital gains from passive investment income;
- Improving the treatment of bank director shares for S Corporation purposes;
- Improving the tax treatment of bank bad debt reserves;
- Reforming the treatment of the sale of an interest in a qualified Subchapter S subsidiary; and
- Expanding eligible beneficiaries of an electing small business trust.
ICBA appreciates the strong support for inclusion of these S Corporation reforms by Senate Finance Committee Chairman Max Baucus (D-Mont.), Ranking Minority Member Charles Grassley (R-Iowa), Sens. Orrin Hatch (R-Utah), Blanche Lincoln (D-Ark.), and Gordon Smith (R-Ore.) and Ways and Means Chairman Charles Rangel (D-N.Y.).
Nearly four million Subchapter S small businesses in the U.S., including one-third of all U.S. banks or about 2,400 community financial institutions, have elected S Corporation status. "ICBA looks forward to seeing this important legislation passed by the full Congress and signed into law," added Ghiglieri.
For additional detail on the ICBA-backed tax relief provisions visit www.icba.org and the Joint Committee on Taxation http://www.house.gov/jct/x-24-07.pdf.