Tax Breaks Proposed
Senators push for oil-spill tax breaks
A bipartisan group of eight U.S. senators, including Mississippi’s Thad Cochran and Roger Wicker, want a tax break for businesses hurt by the BP Gulf oil disaster attached to any tax legislation Congress passes in the lame-duck session.
In a letter to Senate Finance Chairman Max Baucus, D-Mont., and ranking minority member Charles Grassley, R-Iowa, the eight senators call for allowing tax deferral on oil spill–related insurance and claims payments that are reinvested within five years. The proposal also would allow qualified businesses to “carry back” — re-file prior-year tax returns — to claim oil spill–related losses, similar to carryback extensions allowed after Hurricane Katrina and other disasters.
The lawmakers say the provisions would cost about $279 million over 10 years.
“The BP oil spill resulted in severe economic losses for many small businesses in Mississippi and throughout the Gulf Coast region,” said Wicker, 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.”
Cochran said the oil disaster compounded economic problems the Coast faced, and the tax breaks “would give small businesses on the Coast greater opportunities to survive and grow beyond these challenges.”
Sen. Mary Landrieu, D-La., another sponsor, said: “Make no mistake of it, BP will be on the hook for all losses and damages caused by the 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 spill.”
The others sponsors are Sens. Bill Nelson, D-Fla.; George LeMieux, R-Fla.; David Vitter, R-La.; Richard Shelby, R-Ala.; and Jeff Sessions, R-Ala.
Other recommendations discussed as oil-disaster tax relief measures include allowing those economically hurt to take early withdrawals from retirement plans without penalty; allowing states to issue tax-exempt bonds; low-income housing tax credits; a tax holiday for hotels and car-rental companies to help tourism; and tax credits for employers hiring new workers.