ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release October 11, 2004 #04-49
E-mail: [email protected]

ACB APPLAUDS PASSAGE OF SUBCHAPTER S REFORMS

Press Release Tools
	E-mail This Press Release
	Printer-Friendly Format

WASHINGTON, D.C. — America’s Community Bankers applauded final congressional passage today of significant improvements to the subchapter S option for banks. The provisions were included in the American Jobs Creation Act.

"ACB worked closely with the leadership of the tax-writing committees to bring about these reforms, which will help additional community banks qualify for S corporation tax status," said Robert R. Davis, ACB’s executive vice president and managing director of government relations.

"The subchapter S provisions will help ease the punitive double tax burden now faced by thousands of small businesses and financial institutions nationwide. These reforms will provide a fundamental boost to economic growth by unleashing the potential of small businesses that are essential to creating jobs and meeting community credit needs," he added.

Davis thanked the conferees for their support, especially House Ways and Means Committee Chairman William Thomas (R-Calif.) for including the provisions in the original House-passed bill, and Senate Finance Committee Chairman Charles Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.), the committee’s ranking Democrat, for their support over the years for reform.

The major S corporation provisions would:

Increase the number of allowable shareholders from 75 to 100.
Allow family members, under a very broad six-generation definition of "family," to be treated as one shareholder.
Allow an Individual Retirement Account to be a shareholder of an S corporation bank, limited to bank stock held by an IRA on the date of enactment of the provision.
Exclude from excess net passive income rules the interest income and dividends on assets required to be held by a bank or bank holding company.

ACB was also instrumental in convincing Congress not to codify the economic substance doctrine, which could limit the use of statutory exemptions and deferrals for legitimate tax purposes.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

-30-