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WASHINGTON, DC – U.S. Senator Pat Roberts announced the sweeping tax relief bill he introduced called the Kansas Disaster Tax Relief Assistance Act, was approved unanimously by the U.S. Senate and will provide significant tax relief to individuals and businesses in counties declared disaster areas after the May 4 storms. Senator Sam Brownback cosponsored the bill.
"I am pleased the Senate was able to act so quickly on this legislation," Senator Roberts said. "With so many financial uncertainties facing victims of these storms, especially those in Greensburg, we need to provide residents with every tool they can possibly use as they rebuild their homes, businesses and lives."
"I appreciate the quick action by my Senate colleagues to pass the tax provisions for Greensburg and the surrounding areas that were devastated by the recent tornados," Senator Brownback said. "These tax provisions will help people get back on their feet and rebuild their communities for future generations. Moving forward, I will continue to look for ways to support the city of Greensburg and other areas affected by the storms."
Senator Roberts, a member of the Senate Committee on Finance which has jurisdiction on tax issues, worked with Finance Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) on getting the legislation immediately to the Senate floor. It is rare to get a tax bill approved unanimously through the U.S. Senate in nine days.
"During the President’s visit to Greensburg," Roberts said,"we met with Kelly Estes, President of the John Deere Dealership in Greensburg, and learned that he planned to pay his employees despite business suffering from the storms. We were able to include an employee retention tax credit for small businesses to help employers like Kelly preserve their operations."
The legislation is applicable to any counties declared eligible for individual assistance as of date of enactment. The following provisions are included in the bill:
Employee Retention Credit for Small Businesses – Establishes a tax credit for wages paid after May 4, 2007, and before December 31, 2007, by employers located in an eligible county. The credit only applies while the business is not operating.
Casualty Loss – Eliminates the ten percent and one-hundred dollar floor for casualty losses resulting from the storms and incurred in eligible counties, including those claimed on amended returns.
Extended Replacement Period for Damaged Property – Extends the replacement period to five years for business and residential property that was damaged or destroyed as a result of the storms.
Provides 50-percent bonus depreciation to help businesses rebuild – Permits businesses to claim an additional first-year depreciation deduction equal to 50 percent of the cost of new property investments made in an eligible county.
Increase in Expensing for Small Businesses – Doubles the expensing limit for expenses and increases the level of investment at which benefits phase out from $400,000 of annual investments to $1 million.
Partial Expensing for Demolition and Cleanup Costs – Allows businesses to expense up to 50 percent of the clean-up and demolition costs.
Net Operating Loss Carryback – Extends the net operating loss carryback period from two to five years for net operating losses attributable to (1) new investment and repairing existing investment; (2) business casualty losses; and (3) moving expenses and temporary housing expenses for employees working in the affected area.
Income Eligibility for Residential Rentals – Allow operators of qualified residential rental projects to rely on the representations of prospective tenants displaced by the disaster for purposes of determining whether they satisfy the income limitations for qualified rental projects.
Early Withdrawals from Retirement Plans – Waives the penalty for early withdrawal from IRAs and other retirement plans for individuals in the affected area, allows individuals to re-contribute withdrawals over a three year period.
The bill now awaits introduction and debate in the House. Senator Roberts will work with his colleagues to ensure swift passage.
