FOR IMMEDIATE RELEASE
ICBA Praises Beneficial Katrina Tax Relief Package
Tax Relief to Boost Employment For Small Businesses Lauded
Washington, D.C. (Sept. 22, 2005) -- The Independent Community Bankers of America (ICBA) applauds the House and Senate Tax Committee Chairs and Ranking Members for quickly advancing a beneficial tax relief package for individuals and business impacted by Hurricane Katrina. The bill, the Katrina Emergency Tax Relief Act of 2005, H.R.3768, contains ICBA-backed measures to boost employment opportunities in the disaster areas including a provision to grant employers a 40% tax credit for the first $6,000 in a worker’s wages.
“The provisions in this measure by design ease some of the difficulty caused by Hurricane Katrina that Gulf Coast residents and businesses face,” said Camden Fine, ICBA president and CEO. In particular, Fine pointed to key provisions intended to boost employment in the hard hit areas. “Income is critical for individuals at this time, so the employment tax relief in this bill will be especially helpful as community banks and their small business customers work to retain and hire employees,” said Fine.
Working with community bankers and small businesses directly affected by Katrina, ICBA crafted more than fifty recommendations to provide relief in the Gulf Coast. ICBA commended House Ways and Means Committee Chairman Bill Thomas (R-CA), Senate Finance Committee Chairman Charles Grassley (R-IA), Senate Finance ranking minority member Max Baucus (D-MT) and Ways and Means ranking minority member Charles Rangel (D-NY) for their bipartisan advancement of this initial tax relief measure. “This is an important step in stabilizing and rebuilding the region,” said Fine, praising lawmakers for their quick efforts on the tax relief front.
Fine also urged lawmakers to make further tax law changes and continue their support of individuals and businesses in the disaster areas. “The area will need subsequent tax relief measures in the weeks ahead to address the scale and scope of this disaster,” said Fine.
Among ICBA’s tax-related recommendations are:
- Allow a five-year net operating loss (NOL) carry back for financial institutions in disaster areas to help free up cash for reinvesting in the impacted communities.
- Increase immediate expensing to $250,000 for small business investment in equipment, furniture and fixtures, computers, and software in disaster areas through 2007.
- Raise current bank-qualified municipal bond issuance limit to $30 million from $10 million and index for inflation so municipalities in disaster zones can better attract the funds to rebuild.
- Allow financial institutions to invest in tax exempt, bank-qualified bonds authorized as part of a new $10 billion tax-free “Katrina redevelopment” bond program.
A complete list of ICBA Katrina recommendations can be found at www.icba.org.