WASHINGTON–The Independent Community Bankers of America has issued a statement that it is generally supportive of the tax reform legislation that has come out of the House Ways & Means Committee, but also noted it has “serious concerns” that the proposal does not change the tax exemption of credit unions.
In a letter to Committee Chairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA), ICBA President and CEO Camden R. Fine wrote that community bankers are encouraged by many provisions of the Tax Cuts and Jobs Act.
Fine noted the ICBA supported numerous provisions in the legislation, including the 20% corporate rate, the lower 25% rate for passive shareholders in Subchapter S community banks, estate tax relief, repeal of the alternative minimum tax for individuals and corporations, and the permanent extension of the Section 179 deduction.
The ICBA said it is also pleased that HR 1 does not repeal the deduction for business interest, “but provides a workable safe harbor that will allow small businesses to continue to deduct their interest in full.”
The ICBA added, however, that it “has significant concerns that the plan does not eliminate or curtail the generous taxpayer subsidies given to credit unions and Farm Credit System lenders, would limit deductions for Federal Deposit Insurance Corp. premiums, applies an unworkable formula for active shareholders of Subchapter S community banks, penalizes non-qualified deferred compensation plans, and terminates the new markets tax credit for low-income communities.
The trade group said it would continue to work with Congress to get its priorities addressed.