Bank trade groups are urging lawmakers to pay attention to community banks when drafting new tax regulations this summer.
Complaining that tax relief for small banks is "long overdue," the Independent Community Bankers of America on Friday asked the Senate Finance and House Ways and Means committees to support a number of tax relief initiatives, including one that would phase out the so-called death tax.
"Too many farmers, small businesses, and local banks are forced to liquidate and shut down just to pay estate taxes at the time of the owner's death," the ICBA said in a press release Friday.
The American Bankers Association also weighed in on tax relief Friday, announcing that it has established a task force to examine the tax burden on community banks. Among the issues the group will study: deductibility of loan origination costs, expanding the number of shareholders for Subchapter S banks, and accelerating bad-debt reserve deductions.
"There are 300 provisions in the tax code that apply exclusively to community banks, and many of them are outdated, unnecessary, or overly complex," said Joe Williams, chairman of the ABA's Community Bankers Council and president and chief executive officer of American Heritage Bank in El Reno, Okla.
Leveling the playing field with credit unions is also a key concern of the bank trade groups.
They are asking lawmakers to support a bill introduced by Rep. Pete Sessions, R-Tex., that would reduce the tax liability of banks with less than $1 billion of assets.