FOR IMMEDIATE RELEASE
ICBA Urges Targeted Tax Relief in Gulf Disaster Zone
Targeted Tax Incentives Are Vital To Rebuilding Devastated Areas
Washington, D.C. (Sept. 27, 2005) -- The Independent Community Bankers of America (ICBA) urged Congress to quickly pass legislation that offers community banks, small businesses and others affected by hurricanes Katrina and Rita tax relief in order to spur the rebuilding and revitalization of the Gulf Coast region.
“Community banks have helped build many of these impacted communities and they will be there to help in the recovery and rebuilding efforts,” ICBA said in letters to Rep. William M. Thomas (R-Calif.), chairman of the House Ways and Means Committee and Sen. Charles Grassley (R-Iowa), Chairman of the Senate Finance Committee. “To address the scale and scope of the devastation along the Gulf Coast, additional targeted tax incentives will be vital,” the letter continued.
Among the ICBA recommended tax relief measures are:
A five-year net operating loss (NOL) carryback for financial institutions in the designated disaster areas. This would directly free up cash for reinvesting and rebuilding;
Increase immediate expensing to $250,000 for small business investment in equipment, furniture and fixtures, computers and software through 2007;
Raise the current bank-qualified municipal bond issuance limit to $30 million from the current $10 million and index the limitation to inflation so municipalities in disaster areas can better attract funds to rebuild;
Establish a special, tax-free $20 billion redevelopment bond (similar to New York City Liberty Bonds) and permit financial institutions to invest in these bonds as triple tax-exempt., bank qualified bonds;
Apply 20% and 50% community bank tax credits for financial institutions operating in designated disaster zones.
More than 120 community banks impacted by Hurricanes Katrina and Rita provided input on the relief measures. The Senate Finance Committee is scheduled to discuss these issues during a hearing on Wednesday, Sept. 28.
For a complete list of hurricane-related ICBA recommendations to Congress go to www.icba.org.