U.S. Senators Roger Wicker (R-Miss.) and David Vitter (R-La.) introduced legislation on Wednesday to help Gulf Coast businesses and workers affected by the Deepwater Horizon oil spill. The Wicker-Vitter bill would provide tax assistance and investment incentives to spur job creation along the coast.
"The tax relief and economic incentives provided in this legislation would offer immediate assistance to those along the Gulf Coast who have suffered economic harm because of the oil spill," said Wicker. "Although Mississippians affected by this spill are being reimbursed for lost income by those responsible, the disaster has created other challenges that compensation alone does not address. For example, some small business owners are being forced to dip into their retirement savings to keep their business afloat during this time and should not be penalized by the tax code."
"The commonsense provisions in this bill, modeled after the helpful GO Zone incentives, will provide tax relief and investment incentives that can bring back job growth to Louisiana and the entire Gulf Coast. This bill, along with the ongoing effort to ensure that BP pays for the cleanup and economic damages it has caused, will help keep our recovery on track," said Vitter.
Wicker and Vitter introduced the Gulf Coast Oil Recovery Zone Tax Relief and Economic Recovery Act, S. 3934, to help provide stability during the ongoing recovery process.
The bill gives tax relief to the Gulf Coast region affected by the oil spill. Fishing, restaurant, or tourism businesses in the zone that suffered an economic loss would be allowed to claim a tax deferral on the income from BP payments and insurance proceeds resulting from the spill if the earnings are reinvested back into the respective business. Also, individuals living in the zone who sustained economic losses as a result of the spill could claim up to $100,000 penalty-free from their retirement accounts.
In addition, the bill promotes job creation along the Gulf. For new hires in the zone that remain on a firm's payroll, an employer could claim an income tax credit of 40 percent of the first $6,000 in wages paid during the worker's first year of employment. Following the BP Deepwater Horizon oil spill, many hotels, restaurants, and other businesses along the Gulf saw a significant drop in business, threatening thousands of jobs in the region. While the BP relief funds provide some assistance, there are areas in the tax code that need modification in light of the disaster.
The Gulf Coast region was not declared a disaster area by the President as a result of the unique nature of the man-made BP oil spill. Because no disaster area was declared, certain tax benefits that are normally available to help residents after a disaster did not apply. The Wicker-Vitter legislation would address some of these inadequacies