Banks Seek Billions In New TaxBreaks
WASHINGTON - (05/04/05) -- A bill introduced in CongressTuesday at the behest of the banking lobby would provide billionsof dollars in new tax credits and exemptions for community banks,at the same time the bankers are stepping up their efforts torepeal the credit union tax exemption. The bill, dubbed theCommunity First Act, would: allow a 20% tax credit for closely heldSubchapter C corporation banks; provide community banks indistressed areas with a 50% tax credit; repeal the AlternativeMinimum Tax for banks up to $5 billion in assets; and exempt incomeearned on agricultural and mortgage loans in small communities fromtaxation. The measure would also provide a variety of otherregulatory relief measures for banks on reporting and privacyissues. The bill was praised by the Independent Community BankersAssociation, which has worked to get it introduced. "Our membersare excited about this proposal because it will benefit consumers,small businesses, local governments and others who depend oncommunity banks for financial support," said David Hayes, chairmanof the ICBA and president of Security Bank, Dyersburg, Tenn. "Bylifting the yoke of regulatory burden off their backs, and movingthem closer to tax parity with tax-exempt credit unions, communitybanks can focus their resources on better serving theircustomers."