On November 16th, the United States House of Representatives cleared a major hurdle by passing H.R. 1 – the Tax Cuts and Jobs Act by a vote of 227-205. All Illinois Republican members of the House voted in favor and all Illinois Democrats voted against the bill. The legislation contained several provisions which the Independent Community Bankers of America (ICBA) and CBAI support, including: the 20% corporate rate, estate tax relief, and repeal of the alternate minimum tax for individuals and corporations. Both Associations, however, have significant concerns about several provisions including the treatment of Subchapter “S” corporations and active shareholders of Subchapter “S” community banks.
Approximately one third of all community banks are organized under Subchapter “S”. Subjecting these community banks to a higher maximum tax rate exacerbates the tax disparity among financial service providers, would disrupt the corporate and tax structure of the community bank industry, and would harm community banks’ ability to serve their customers and communities. CBAI recently issued an Action Alert, in conjunction with the ICBA, urging CBAI Subchapter “S” community bankers to weigh-in with their Member of Congress to ensure meaningful relief under the tax code. This Action Alert generated more than 3,500 responses nation-wide.
On November 9th the Senate Finance Committee released its version of the Tax Cuts and Jobs Act, and as of November 17th has concluded four days of marking-up their bill. ICBA has published an Issues Brief which describes the differences between the House and Senate versions of tax relief and reform and where more attention is needed. CBAI looks forward to working with our community bank members, the Illinois congressional delegation, and the ICBA in improving the tax legislation as it moves through Congress. Read ICBA’s Issues Brief.
November 21, 2017