Our Position

Tax Policy


  • Tax laws should promote robust economic activity and a vibrant community banking sector and foster saving and investment.
  • The 2017 Tax Cuts and Jobs Act has provided significant tax relief for community banks and their customers. Community bank tax savings support community lending and investment in workforce, technology, and physical infrastructure. ICBA will advocate for permanent extension of the individual provisions, including the deduction for pass-through income (Section 199A), a top individual rate of no more than 37 percent, preferential tax rates for capital gains, and an adequate estate tax exemption, before their scheduled expiration in 2026.
  • ICBA opposes any new bank-specific fees, punitive new tax levies, transaction taxes, limitations on the deductibility of FDIC premiums, or other proposals specifically targeting the financial services sector. Additionally, ICBA will continue to oppose any legislation – tax or non-tax – that requires revenue offsets or “pay fors” that target the banking industry, in particular account reporting to the IRS.
  • Public policy should support community banks’ ability to raise capital including allowing S corporation banks to issue preferred stock, increasing their shareholder limits, and allowing new IRA shareholder investments.
  • ICBA supports the creation of tax incentives for community bank retained earnings and community bank lending to low-to-middle income people, small businesses, and small farms.
  • The tax code should create parity among all providers of financial services. Credit unions, Farm Credit System lenders, and community banks offer similar products and services and should be taxed equivalently.
  • ICBA opposes changes that would effectively increase the taxation of estates, including taxation of capital gains at death and eliminating or curbing stepped up basis in the valuation assets. Such changes would trigger sales of community banks and promote industry consolidation.
  • ICBA opposes any new limitations on Section 1031 exchanges.


ICBA continues to promote tax and budget policies that foster economic growth and support the community bank sector by providing direct tax relief and encouraging private savings and small business investment. A fair and unbiased tax code will enhance the viability of community banks and the vital role they serve in the U.S. economy as a source of lending for consumers, small businesses, and farms.

Tax relief created by the 2017 Tax Cuts and Jobs Act has supported community lending and investment in workforce, technology, and physical infrastructure. Repeal of these changes or the imposition of new taxes, such as were considered in Congress in 2021, would be devastating to the continued independence of American small businesses. Higher taxes on community bank operating income or higher estate taxes, coupled with a recent surge in regulatory burden, would accelerate the current trend toward consolidation in the banking sector.

ICBA supports carefully designed tax incentives for community bank lending to low-to-middle income individuals, small businesses, and small farms. These incentives would lower credit costs for targeted borrowers and help community banks diversify their loan portfolios and comply with the Community Reinvestment Act.

Tax incentives for community bank retained earnings would strengthen capital and promote lending. Such tax relief would also narrow the tax gap between community banks and tax-exempt credit unions and Farm Credit System (FCS) lenders, many of which are multi-billion-dollar entities. These institutions have evolved into the equivalent of banks and should be taxed equivalently.

Staff Contact

Alan Keller

SVP, Legislative Policy


[email protected]

Stephen Keen

SVP, Congressional Relations


[email protected]

Be Heard

Direct grassroots advocacy is essential to promoting federal policies that support community banking – and ultimately impact your role at the bank. Our Be Heard grassroots action center offers a variety of tools to help you amplify your voice with targeted outreach to federal policymakers. 

Learn More

Virtual Advocacy Toolkit

Just like everything else, lobbying is a skill. This toolkit makes it easy to learn the best way to communicate with and engage policymakers in this virtual environment.  No matter what role you have at the bank, YOU can support community banks and make an impact.

Get Started

You are Invited to Capital Summit

Every year, community bankers are invited to attend the complementary ICBA Capital Summit and this year is easier than ever to participate. The event is fully virtual, April 27 at 11am-1pm Eastern Time, so mark your calendars!

Register Today