The American Bankers Association strongly supports several provisions in the federal budget reconciliation tax package, including language to make permanent the Section 199A pass-through deduction, ABA President and CEO Rob Nichols said today.
In a letter to the leaders of the House Ways and Means Committee, Nichols singled out five provisions in the bill endorsed by ABA. They include the 199A deduction, with many community banks organized as S corporations (“pass-through” businesses).
“Making permanent and expanding the Section 199A pass-through deduction will help these banks remain financially strong, supporting their ability to lend to small businesses and individuals in their communities, especially under-served rural areas,” Nichols said.
ABA also supports:
- Language adding a modified version of the Access to Credit for our Rural Economy, or ACRE, Act. The provision would provide some tax relief on income earned from interest on new agricultural real estate loans and new loans for rural residences in a population area of less than 2,500 people with a mortgage value of less than $750,000.
- A provision to extend and enhance the estate tax exemption. “Without an extension of the estate tax exemption, many family-owned community banks and small businesses would face the threat of having to liquidate or divest simply to generate liquidity to pay a tax bill,” Nichols said.
- Language to extend the GILTI, FDII and BEAT Rates. The tax package would make permanent the preferential rates on global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII) and extend the current base-erosion and anti-abuse tax (BEAT) rates.
- A provision to strengthen the Low-Income Housing Tax Credit. “Increasing the state housing credit ceiling and modifying the tax-exempt bond financing requirement would allow banks to support much-needed affordable rental housing across the nation,” Nichols said.
