FOR IMMEDIATE RELEASE
ICBA Praises Subchapter S Tax Relief for Small Businesses
Community Bank Small Business Customers to Benefit
Washington, D.C. (January 16, 2007)—The Independent Community Bankers of America (ICBA) praised Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Minority Member Charles Grassley (R-IA) for advancing ICBA-backed tax reforms in their latest tax relief bill. The Baucus-Grassley bill would help existing S corporations and allow more community banks and small businesses to elect beneficial subchapter S status.
"The Small Business and Work Opportunity Act of 2007 contains reasonable relief measures to help ease the punitive double tax burden faced by thousands of small businesses and community banks," said Camden R. Fine, ICBA president and CEO. "Electing subchapter S status is a proven means to prevent double taxation and improve the viability of small businesses such as community banks, which are financial lifelines for many businesses and local economies. Today there are more than 2,400 subchapter S community banks -- approaching one-third of all banks nationwide."
Key subchapter S reforms included in the Baucus-Grassley bill include:
- Excluding capital gains from passive investment income.
- Improving the treatment of bank director shares.
- Allowing recapture of bad debt reserves.
- Reforming the treatment of sale of interest in a qualified subchapter S subsidiary.
- Eliminating all earnings and profits attributable to pre-1983 years.
- Expanding eligible beneficiaries of an electing small business trust.
ICBA appreciates the strong bipartisan efforts to advance these S corporation reforms by Sens. Orin Hatch (R-UT) and Blanche Lincoln (D-AR) and other concerned senators, and thanks Chairman Baucus for advancing beneficial S corporation reforms in legislation to increase the federal minimum wage. ICBA looks forward to this important legislation passing the full Congress.
For additional information on ICBA's tax relief measures and to read ICBA's comprehensive tax options study visit www.icba.org.