Congressional leaders today unveiled a federal budget reconciliation tax package that contains several banking industry priorities, including language to expand access to affordable real estate credit in rural areas, as championed by the American Bankers Association.
The package would make permanent many of the tax reforms from President Trump’s first term in office, as well as new tax changes. Among its many provisions is language partially adopting the Access to Credit for our Rural Economy Act, or ACRE Act. The language would provide some tax relief on income earned from interest on new agricultural real estate loans.
ABA and state bankers associations in April urged lawmakers to include ACRE in the reconciliation package, saying it would provide much-needed help to farmers, ranchers and rural communities facing an uncertain economic outlook.
Other ABA-backed priorities in the package include:
- A provision making permanent and enhancing the Section 199A pass-through deduction.
- Language to expand and extend the estate tax exemption, which would spare family-owned community banks and small businesses from the threat of having to liquidate or divest simply to generate liquidity to pay a tax bill.
- Language making permanent the preferential rates on global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII), and extending the current base-erosion and anti-abuse tax (BEAT) rates.
Despite strong ABA advocacy, the bill does not include any changes to the tax-exempt status of credit unions. House leaders hope to complete work on the reconciliation bill by the Memorial Day holiday. The Senate will also need to approve any final bill.
“We welcome House Republicans decision to include the ACRE Act and other ABA-supported tax code provisions in this important legislation. ACRE’s inclusion in particular is a win for farmers, ranchers and rural communities across this country,” said Kirsten Sutton, EVP for Congressional Relations and Legislative Affairs at ABA. “As the tax bill advances, we will continue to make the case for modifying the credit union industry’s tax treatment to align with its activities.”
Editor’s note: An earlier version of this article included a reference to new loans for rural residences that was inaccurate. That reference has been removed.
