A bipartisan group of eight lawmakers representing Gulf Coast states urged the Senate to include tax relief for victims of the BP oil spill in any tax legislation package moving through Congress in the remaining weeks of session.
In a letter today to Senate Finance Committee Chairman Max Baucus and Ranking Minority Member Senate Chuck Grassley, the lawmakers wrote, "This unprecedented disaster has had a dramatic, negative impact on fishermen, shrimpers, oystermen, hotels, restaurants, and other tourism-related businesses on the Gulf Coast. It is essential that we provide relief to the companies and individuals that were devastated through no fault of their own."
The tax provisions are intended to provide relief for struggling small businesses that were hit hard by the Gulf Coast oil spill. Included in the proposal is a tax deferral for small business reimbursements that are reinvested in an oil spill recovery zone trade or business. The bipartisan group also asked the committee chairman and ranking member to allow qualified businesses to claim a five-year net operating loss carryback for losses related to the oil spill. An extended carryback period is often implemented in presidentially declared disaster areas.
"The BP oil spill resulted in severe economic losses for many small businesses in Mississippi and throughout the Gulf Coast region," said Sen. Roger Wicker, (R-Miss.), the measure's lead Republican sponsor. "These tax relief provisions will help small business owners keep their doors open and overcome the many financial obstacles caused by the oil spill."
"We ought to do everything we can to help folks along the Gulf Coast get back on their feet," said Sen. Bill Nelson (D- Fla.). "This is just one more way to do that."
"The disruptions caused by the BP tragedy compounded the problems already faced by Gulf Coast businesses in an economic downturn. Tax benefits such as these would give small businesses on the coast greater opportunities to survive and grow beyond these challenges," Senator Thad Cochran (R-Miss.) said.
"Small businesses in Louisiana and the rest of the Gulf Coast have faced unprecedented obstacles over the last five years," said Sen. Landrieu. "Make no mistake of it, BP will be on the hook for all losses and damages caused by this disaster, but, in the meantime, thousands of small businesses are struggling to keep their doors open and workers are being let go by no fault of their own. Right now, Congress must do everything within its power to make sure that not a single Gulf Coast business is bankrupted by this oil spill."
"Small businesses owned by generations of Floridians have suffered a series of setbacks including hurricanes, the recession, and now the oil spill. Offering tax relief to those suffering economic challenges is a lifeline that might help many families keep their business. Congress should move this relief forward with the larger tax package," said Sen. George LeMieux, (R-Fla.).
"What we're asking for here is simple -- provide tax relief to those who have been directly impacted by the oil spill. As those families and small businesses continue to recover, we must do all we can to bring back job growth to Louisiana and the entire Gulf Coast," said Vitter.
"Businesses along the Gulf Coast are not only trying to survive now but also prepare for the next tourist season, which is quickly approaching," said Sen. Richard Shelby. "None of these businesses is responsible for causing the hardship they now face. Congress must grant these struggling businesses the tax relief they need to make it through these difficult times."
Below is the full text of the letter to Chairman Baucus and Ranking Member Grassley.
Dear Chairman Baucus and Senator Grassley,
As the Senate finalizes tax legislation at the end of the 111th Congress, we urge you to include appropriate tax relief for Gulf Coast victims of the tragic BP oil spill. This unprecedented disaster has had a dramatic, negative impact on fishermen, shrimpers, oystermen, hotels, restaurants, and other tourism-related businesses on the Gulf Coast. It is essential that we provide relief to the companies and individuals that were devastated through no fault of their own.
In particular, we ask that you include provisions that would:
1. Allow qualified fishermen and related businesses on a limited and temporary basis to defer certain taxes on the proceeds of oil spill-related insurance and claims payments that are reinvested within five years;
2. Allow qualified businesses to claim a five year net operating loss carryback for certain oil spill-related losses.
The Joint Committee on Taxation recently estimated these provisions will cost $279 million over ten years.
We urge you to include this critical tax relief for citizens of the Gulf Coast as part of any tax package that moves through the Senate during the lame duck session. Thank you for your attention to this issue of such importance to our region of the country.
Roger F. Wicker