ABA this week submitted a statement for the record expressing support for two bills introduced by Rep. Kenny Marchant (R-Texas) that would provide banks more flexibility under the Internal Revenue Code.
The Capital Access for Small Business Banks Act (H.R. 2798) would help facilitate the additional raising of bank capital by expanding both the number of potential shareholders and the types of stock that can be issued by banks currently operating under Subchapter S of the IRC. The Community Bank Flexibility Act (H.R. 3287) would allow an institution organized as limited liability companies to be treated as a bank under Section 581 of the IRC for tax purposes, allowing it to achieve tax efficiencies by having the income of the corporation taxed only once at the shareholder level.
“Rep. Marchant’s legislation will provide additional important tax efficient alternatives for banks to raise capital,” ABA said. “The ABA supports these two changes to the IRC that will help promote strong banks, encourage growth and stronger, more economically vibrant communities.”