Senate Passes Grassley's Tax Relief Package for Flood and Tornado Recovery

Press Release

Senate Passes Grassley's Tax Relief Package for Flood and Tornado Recovery

A year-end bill to extend expiring federal tax provisions was passed by the Senate today and includes a $6 billion package of disaster-related tax relief sponsored by Senator Chuck Grassley and tailored to help flood and tornado victims in Iowa and other states recover and rebuild.

The disaster tax relief package is separate from additional federal dollars for disaster recovery that Congress may provide in year-end appropriations legislation.

The House of Representatives could take up the tax bill at any time. Grassley urged that it be passed quickly and sent to the President's desk to be signed into law.

"This disaster tax relief package is a major victory for Iowa.

It was worth fighting for in Congress because these provisions proved their value for disaster recovery after Hurricane Katrina. They are designed to help small businesses keep their doors open, communities rebuild infrastructure, charities raise more relief money, and families rebuild their homes and lives," Grassley said.

The disaster tax relief package is modeled after what was passed for Hurricane Katrina victims three years ago.

Grassley has kept the pressure on Congressional leaders all summer to take similar action for natural disaster victims in Iowa and throughout the Midwest. In 2005, while Grassley was chairman of the tax-writing committee in the Senate, a major individual tax relief package was signed into law within three weeks of the Katrina disaster. A few weeks later, Congress followed up with an infrastructure and business tax relief package.

Grassley's disaster tax relief package was cosponsored this summer by every member of Iowa's congressional delegation and Republican and Democratic senators from nine other states hard hit this year by severe weather.

"Iowans deserve to have every kind of help that Washington can provide," Grassley said. "The kind of tax relief in this legislation translates into real help for small businesses who need every tool they can access in order to rebuild and keep operating after the devastating storms. It lowers their tax liability and puts small business owners in a better position to balance their books. Small businesses will be able to more quickly write off the demolition and remediation expenses. They will be able to take a tax credit for maintaining employees who they would otherwise have to lay off."

Among other provisions, the legislation would let disaster victims with damage to their primary residence tap their assets and access cash by withdrawing money from retirement plans without tax penalties; suspend limits on tax incentives for charitable contributions, strengthening local and other fundraising drives collecting money to help small businesses and families recover; create tax-credit bond authority to help local governments rebuild infrastructure; increase the amount of tax-exempt bond authority to help businesses receive below-market interest rate financing; remove limitations on deducting casualty losses due to natural disaster; and reduce the 2008 tax burden for small and mid-sized businesses by substantially increasing the 2008 deductions for the depreciation and expensing of business property.

BREAK IN TRANSCRIPT

Source