FOR IMMEDIATE RELEASE
ICBA-Crafted Tax Relief Passes Congress
Thousands of Subchapter S Small Businesses, Including Community Banks, to Benefit
Washington, D.C. (May 25, 2007)—The Independent Community Bankers of America (ICBA) welcomed passage of several ICBA-crafted tax relief and reform provisions that will help community banks and other small businesses as part of H.R. 2206, a bill to fund military operations.
"This bill is real money for real people who work every day to keep their businesses successful and their communities vital," said Camden Fine, ICBA president and CEO. "ICBA is very pleased that Congress recognizes the importance of tax relief for community banks, their small business customers, and for the communities they serve."
Coupled with a federal minimum wage increase, the ICBA-backed small business and Subchapter S tax measures have been incorporated into a larger $4.8 billion small business tax package, part of a much larger military operations funding bill that Congress sent to the president for his signature.
ICBA-backed business provisions included in the bill will:
- Exclude capital gains from passive investment income for Subchapter S businesses;
- Ease the treatment of Subchapter S bank director shares;
- Improve the tax treatment of bank bad debt reserves; and
- Expand the ICBA-backed Section 179 small business expensing limits estimated to save small businesses about $70 million.
These tax relief measures will help existing Subchapter S community banks and allow additional banks to more easily elect the tax-saving S corporation status. S corporations avoid punitive double taxation by paying tax on the banks' income once at the individual shareholder level. 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. Several of the tax relief provisions are part of the ICBA-inspired Community Banks Serving Their Communities First Act, H.R.1869 and S.1405.
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-29-07.pdf.