After years of lobbying Congress for capital gains tax relief, a group of banks in the venture capital business is expecting to hear something definite next month.
The Alliance for Business Investment-a group that includes BankAmerica Corp., BankBoston Corp., Chase Manhattan Corp., Citicorp, Fleet Financial Group Inc., and Norwest Corp.-since 1993 has been seeking capital gains tax legislation that would give corporations more incentive to invest in small companies.
The alliance also has been lobbying to expand the definition of small business to include those with assets of up to $100 million. Such a move would increase the number of businesses whose stock could afford its buyers tax benefits.
"We are very supportive of capital gains tax reduction because it is good overall for the economy," said William Haraf, director of public policy at BankAmerica in San Francisco.
Banks and others lobbying for new tax laws will get an idea of what legislation may offer this year when the House reports June 13. The Senate Finance Committee's report is due June 27.
The final version of a tax bill could be approved as early as August. The legislation is also expected to cover tax credits for children, estate tax relief, and new Individual Retirement Account provisions.
Among the broad-based capital gains tax provisions being considered is a proposal of particular interest to venture capital investors. The proposal would exempt from taxation 75% of a corporate investor's venture gains. It would also let investors defer taxes on their gains by reinvesting them in other qualified investments.