FOR IMMEDIATE RELEASE
ICBA Praises Action on Subchapter S Reform
Washington, D.C. (Oct. 28, 2003) - The Independent Community Bankers of America praised House Ways and Means Committee Chairman Bill Thomas (R-Calif.) for including ICBA-backed Subchapter S reforms in his new tax reform bill, which was passed out of the committee today. "The American Jobs Creation Act of 2003" (H.R. 2896) would help ease the punitive double tax burden faced by thousands of small businesses and community banks, said Paul Merski, ICBA's chief economist and director of federal tax policy.
Specifically, ICBA outlined key Subchapter S reforms in its comprehensive tax relief study promoted in January. "The endorsement of ICBA's community bank-friendly reforms in the new legislation offered by the powerful Ways and Means Committee Chairman is an extremely positive development for the progress on Subchapter S tax relief," Merski said.
Specifically, Chairman Thomas' provisions would allow more community banks and small businesses to elect Subchapter S corporation status. Electing Subchapter S status is a proven means to prevent punitive double taxation and improve the viability of many small businesses such as community banks, which serve as financial lifelines for many businesses and local economies.
Key reforms included in Chairman Thomas' legislation include:
- Increasing the number of Subchapter S corporation eligible shareholders to 100 from 75;
- Counting family members as only one shareholder;
- Permitting S corporation shares to be held in Individual Retirement Accounts; and
- Easing restrictive passive income and bank director share rules.
ICBA thanks Chairman Thomas for including important S corporation reforms and looks forward to assisting him in passing this legislation in the full Congress.
ICBA's comprehensive tax options study is available at www.icba.org/pressroom. The Web site includes a source list of ICBA staff experts.